Home Sales*

Sales of new single-family homes totaled 897,000 units at a seasonally adjusted annual rate (SAAR) in the fourth quarter of 2001, up a statistically insignificant 3 percent from the previous quarter but down a statistically insignificant 4 percent from the fourth quarter of 2000. The number of new homes for sale at the end of December 2001 was 308,000 units, down a statistically insignificant 1 percent from the past quarter but up a statistically insignificant 4 percent from the fourth quarter of 2000. At the end of December, inventories represented a 3.9 months' supply at the current sales rate, down 11 percent from the end of the previous quarter but up 8 percent from the fourth quarter of 2000.

Annual new home sales for 2001 were 900,000, up a statistically insignificant 3 percent from the previous year. New houses for sale at the end of 2001 totaled 312,000 units, up a statistically insignificant 4 percent from the past year.

Sales of existing single-family homes for the fourth quarter of 2001 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,200,000 (SAAR), unchanged from the third quarter of 2001 but up 2 percent from the fourth quarter of 2000. The number of units for sale at the end of the fourth quarter was 1,820,000, 16 percent below the previous quarter and 1 percent below the fourth quarter of 2000. At the end of the fourth quarter, a 4.2 months' supply of units remained, 21 percent less than the previous quarter and 7 percent below the fourth quarter of a year ago.

The number of existing homes sold in 2001 was 5,251,000, an increase of 3 percent above sales in 2000. The number of existing homes for sale at the end of 2001 declined to 1,820,000, a 1-percent drop from the end of the previous year.

Home Prices

The median price of new homes during the fourth quarter of 2001 decreased to $169,000, down a statistically insignificant 2 percent from the previous quarter and from the fourth quarter of 2000 as well. The average price of new homes sold during fourth quarter of 2001 was $210,700, up a statistically insignificant 1 percent from the third quarter of 2001 but down a statistically insignificant 1 percent from the fourth quarter a year ago.

The annual median price of new homes in 2001 declined to $174,100, down 3 percent from 2000. The annual average price was $211,900, an increase of 2 percent from the past year.

The median price of existing single-family homes in the fourth quarter of 2001 was $148,000, 2 percent lower than the third quarter of 2001 but 6 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of existing homes, $184,900, decreased 3 percent from the previous quarter but was 4 percent greater than the fourth quarter of 2000.

In 2001 the median price of existing homes increased 6 percent to $147,500 and the average price rose 5 percent to $185,100.

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 fourth quarter of 2001 shows that families earning the median income have 147.0 percent of the income needed to purchase the median-priced existing home. This figure is up 7 percent from the third-quarter 2001 index and up 10 percent from the fourth quarter of 2000. Annually the 2001 index increased 9 percent from the previous year.

The fourth-quarter increase 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 35 basis points from the previous quarter to an interest rate of 6.71 percent. The median price of existing single-family homes decreased 2.0 percent from the third quarter of 2001, while the median family income rose 1.2 percent from the previous quarter. The annual data show that the median price of homes increased 6 percent from 2000 while family income rose 5 percent. Over the year the average mortgage interest rate declined by 100 basis points to 7.03.

The fixed-rate index increased from the third-quarter 2001 index and was up 11 percent from the fourth quarter of 2000.

Apartment Absorptions

There were 57,000 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the third quarter of 2001, up 23 percent from the previous quarter but down a statistically insignificant 13 percent from the third quarter of 2000. Of the apartments completed in the third quarter of 2001, 65 percent were rented within 3 months. This absorption rate is unchanged from the previous quarter but 11 percent below the same quarter in the previous year. The median asking rent for apartments completed in the third quarter was $899, which is a statistically insignificant 3 percent above the previous quarter and 7 percent above a year earlier.

Manufactured (Mobile) Home Placements

Manufactured homes placed onsite ready for occupancy in the third quarter of 2001 totaled 190,000 at a seasonally adjusted annual rate, a statistically insignificant 4 percent above the level of the previous quarter but 25 percent below the third quarter of 2000. The number of homes for sale on dealers' lots at the end of the third quarter totaled 65,000 units, unchanged from the previous quarter but 12 percent below the same quarter of 2000. The average sales price of the units sold in the third quarter was $49,800, a statistically insignificant 2 percent above the previous quarter and 6 percent above the third-quarter 2000 price.

Builders' Views of Housing Market Activity

The National Association of Home Builders^TM (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 fourth-quarter value for the index of current market activity for single-family detached houses stood at 55, down 8 points from the third quarter and down 13 points from 2000's fourth quarter. The index for future sales expectations, 58, was down 7 points from the third-quarter value and down 11 points from 2000's level. Prospective buyer traffic had an index value of 39, which is down 2 points from the third-quarter value and down 6 points from 2000's fourth-quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the fourth quarter, this index stood at 51, which is down 6 points from the third-quarter level and down 11 points from the value in 2000.

On an annual basis, the current market activity index averaged 61 in 2001, down 8 points from 2000. The expectations index averaged 63, down 6 points from the previous year. The annual average index of prospective buyers dropped 4 points, to 41. The average of the combined index was 56 for the year, down 6 points from 2000.