HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 893,000 units at a seasonally adjusted annual rate (SAAR) in the fourth quarter of 1999, down a statistically insignificant 1 percent from the previous quarter and down a statistically insignificant 6 percent from the fourth quarter of 1998. New homes for sale at the end of December 1999 totaled 322,000, up a statistically insignificant 4 percent from the last quarter and up 9 percent from the fourth quarter of 1998. At the end of 1999, inventories represented a 4.4 months' supply at the current sales rates, down a statistically insignificant 2 percent from the end of the previous quarter but up 16 percent from the fourth quarter of 1998. The 1999 annual sales of new homes was 904,000, up a statistically insignificant 2 percent from the previous year. The annual amount of houses for sale was 330,000, up 10 percent from the previous year.

Sales of existing single-family homes for the fourth quarter of 1999 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 4,997,000 (SAAR), down 5 percent from the second quarter of 1999 and down 2 percent from the fourth quarter of 1998. The number of units for sale at the end of the fourth quarter was 1,580,000, 20 percent below the previous quarter and 18 percent below the fourth quarter of 1998. At the end of the fourth quarter, a 3.7 months' supply of units remained, 23 percent below the previous quarter and 24 percent below the fourth quarter of 1998. The annual sales of existing single-family homes for 1999 was 5,197,000 homes sold, up 5 percent from 1998, surpassing 1998's record year.

*Units in thousands. **This change is not statistically significant. Sources: New: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development Existing: NATIONAL ASSOCIATION OF REALTORS®

Home Prices

The median price of new homes during the fourth quarter of 1999 was $163,000, up 2 percent from the previous quarter's level and above the fourth quarter of 1998 by 7 percent. The average price of new homes sold during the fourth quarter of 1999 was $203,900, up 6 percent from the third quarter of 1999 and up 12 percent from the fourth quarter a year ago. The price adjusted to represent a constant-quality house was $184,700, unchanged from the third quarter of 1999 but up 4 percent from the fourth quarter of 1998. The values for the set of physical characteristics used for the constant-quality house are based on 1992 sales. The 1999 annual median price increased 5 percent from the previous year to $159,800. There was an increase in the average price of 7 percent to $194,000 and the constant-quality house rose in price to 184,000, up 5 percent over 1998.

The median price of existing single-family homes in the fourth quarter of 1999 was $133,300, down 2 percent from the previous quarter but 4 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of $169,100 was down 2 percent from the previous quarter but up 6 percent from the fourth quarter of 1998. The annual 1999 average price of $169,100 was 6 percent above 1998's average.

**This change is not statistically significant. 1A constant-quality house has the same physical characteristics from year to year and its price is estimated using statistical models. Sources: New: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development Existing: NATIONAL ASSOCIATION OF REALTORS®

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 1999 shows that families earning the median income have 129.7 percent of the income needed to purchase the median-priced existing home. This figure is up 2 percent from the third quarter of 1999 but down 8 percent from the fourth quarter of 1998. The annual 1999 index of 134.4 decreased 3 percent from last year.

The fourth-quarter gain 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 risen 8 basis points from the previous quarter to an interest rate of 7.66 percent. The median price of existing single-family homes declined 2 percent in the fourth quarter. The median family income, while rising less than 1 percent during the fourth quarter of 1999, has increased 4 percent from the same quarter a year ago.

The fixed-rate index increased 2 percent from the third quarter of 1999 but was down 10 percent from the fourth quarter of 1998. The 1999 annual index was 131.8, declined 4 percent from the previous year. The adjustable-rate index gained 3 percent from the previous quarter but declined 6 percent from the same quarter a year earlier. The annual index for 1999 of 145.5 declined 1 percent from last year.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 66,600 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the third quarter of 1999, up 19 percent from the previous quarter and up a statistically insignificant 9 percent from the third quarter of 1998. Of the apartments completed in the third quarter of 1999, 74 percent were rented within 3 months. This absorption rate is 6 percent above the previous quarter and a statistically insignificant 3 percent above the same quarter in the previous year. The median asking rent for apartments completed in the third quarter was $760, which is 9 percent below the previous quarter but a statistically insignificant 6 percent above that a year earlier.

*Units in thousands. **This change is not statistically significant. Sources: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development.

Manufactured (Mobile) Home Placements

Manufactured homes placed on site ready for occupancy in the third quarter of 1999 totaled 276,000 at a seasonally adjusted annual rate, a statistically insignificant 8 percent below the level of the previous quarter and 27 percent below the third quarter of 1998. The number of homes for sale on dealers' lots at the end of the third quarter totaled 123,000 units, 12 percent above the previous quarter and 38 percent above the same quarter of 1998. The average sales price of the units sold in the third quarter was $43,300, a statistically insignificant 1 percent above the previous quarter but 3 percent below the third-quarter 1998 price.

*Units in thousands. These are HUD-code homes only and do not include manufactured housing units built to meet local building codes, which are included in housing completions figures. **This change is not statistically significant. Sources: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development.

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 indexes 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 79, down 1 point from the third quarter and down 6 points from 1998's fourth quarter. The index for future sales expectations, 81, was un-changed from the third-quarter value but down 1 point from 1998's level. Prospective buyer traffic had an index value of 50, which is down 3 points from the third-quarter value and down 5 points from 1998's fourth-quarter level. NAHB combines these separate indexes into a single housing market index that mirrors the three components quite closely. In the fourth quarter, this index stood at 72, which is down 1 point from the third-quarter level and down 4 points from the value in 1998. In the year 1999, the current market activity index averaged 80, the future sales expectations index averaged 80, the prospective buyer traffic index averaged 54, and the housing market index averaged 73.

Source: National Association of Home Builders, Builders Economic Council Survey