Home Sales*

Sales of new single-family homes totaled 911,000 units at a seasonally adjusted annual rate (SAAR) in the second quarter of 2001, down a statistically insignificant 4 percent from the previous quarter but up 10 percent from the second quarter of 2000. The number of new homes for sale at the end of June 2001 was 292,000 units, up a statistically insignificant 1 percent from the past quarter but down 5 percent from the second quarter of 2000. At the end of June, inventories represented a 3.9 months’ supply at the current sales rate, no change from
the end of the previous quarter but down 19 percent from the second quarter of 2000.

Sales of existing single-family homes for the second quarter of 2001 reported by the NATIONAL ASSOCIATION OF REALTORS® totaled 5,303,000 (SAAR), up 1 percent from the first quarter of 2001 and up 4 percent from the second quarter of 2000. The number of units for sale at the end of the second quarter was 1,680,000, 6 percent above the previous quarter and 27 percent above the second quarter of 2000. At the end of the second quarter, a 3.8 months’ supply of units remained, 9 percent above the previous quarter and 23 percent above the second quarter of a year ago.

Home Prices

The median price of new homes during the second quarter of 2001 increased to $172,200, up a statistically insignificant 1 percent from the previous quarter, and rose above the second quarter of 2000 by 6 percent. The average price of new homes sold during the second quarter of 2001 was $207,100, down a statistically insignificant 2 percent from the first quarter of 2001 but up a statistically insignificant 2 percent from the second quarter a year ago.

The median price of existing single-family homes in the second quarter of 2001 was $146,900, 5 percent higher than the first quarter of 2001 and 6 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS®. The average price of existing homes, $184,600, increased 5 percent from the previous quarter and was up 5 percent from the second quarter of 2000.

Housing Affordability

Housing affordability is the ratio of median family income to the income needed to purchase the median-priced home based on current interest rates and underwriting standards, expressed as an index. The NATIONAL ASSOCIATION OF REALTORS® composite index value for the second quarter of 2001 shows that families earning the median income have 138.4 percent of the income needed to purchase the median-priced existing home. This figure is down 3 percent from the first-quarter 2001 index but up 9 percent from the second quarter of 2000.

The second-quarter decrease in the housing affordability index is the result of changes in the marketplace. The national average home mortgage interest rate for existing single-family homes has declined 6 basis points from the previous quarter to an interest rate of 7.15 percent. A year ago the average mortgage rate was 8.19 percent . The median price of existing single-family homes increased 5.1 percent from the first quarter of 2001, while the median family income rose 1.2 percent from the previous quarter.

The fixed-rate index decreased 3 percent from the first-quarter 2001 index but was up 11 percent from the second quarter of 2000.

Apartment Absorptions

There were 43,500 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the first quarter of 2001, down 20 percent from the previous quarter and down a statistically insignificant 12 percent from the first quarter of 2000. Of the apartments completed in the first quarter of 2001, 66 percent were rented within 3 months. This absorption rate is a statistically insignificant 1 percent below the previous quarter and 10 percent below the same quarter in the previous year. The median asking rent for apartments completed in the first quarter was $889, which is a statistically insignificant 3 percent above the previous quarter and 12 percent above a year earlier.

Manufactured (Mobile) Home Placements

Manufactured homes placed onsite ready for occupancy in the first quarter of 2001 totaled 183,000 at a seasonally adjusted annual rate, 13 percent below the level of the previous quarter and 37 percent below the first quarter of 2000. The number of homes for sale on dealers’ lots at the end of the first quarter totaled 67,000 units, 4 percent below the previous quarter and 24 percent below the same quarter of 2000. The average sales price of the units sold in the first quarter was $47,800, a statistically insignificant 2 percent below the previous quarter but a statistically insignificant 6 percent above the first-quarter 2000 price.

Builders' Views of Housing Market Activity

The National Association of Home Builders™ (NAHB) conducts a monthly survey focusing on builders’ views of the level of sales activity and their expectations for the near future. NAHB uses these survey responses to construct indices of housing market activity. (The index values range from 0 to 100.) The second-quarter value for the index of current market activity for single-family detached houses stood at 62, unchanged from the first quarter but down 4 points from 2000’s second quarter. The index for future sales expectations, 66, was up 2 points from the first-quarter value but unchanged from 2000’s level. Prospective buyer traffic had an index value of 42, which is up 1 point from the first-quarter value but down 2 points from 2000’s second-quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the second quarter, this index stood at 57, which is unchanged from the first-quarter level but down 3 points from the value in 2000.