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Recently Released: U.S. Housing Market Conditions, 3rd Quarter 2003

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HUD's Office of Policy Development & Research (PD&R) has
just released the latest issue of "U.S. Housing Market
Conditions," summarizing housing market activity through
the third quarter of 2003.

The report provides a compilation of statistical data and
written reports about the national housing market, as
well as a breakdown by ten regional markets. "U.S.
Housing Market Conditions" also provides market profiles
for ten local markets across the country and presents
year-to-date number of units authorized by building
permits, as well as historical data in summary tables.
Results from the report are summarized below.

The third quarter of 2003 was record-breaking for new
home sales and existing home sales. 1.1 million
(seasonally adjusted annual rate [SAAR]) single-family
new homes were sold and 6.4 million (SAAR) existing homes
were sold. The new home sales volume represents a four
percent increase from the second quarter of 2003, and a
whopping 13 percent increase from the third quarter of
2002. In 13 of the last 14 months, new home sales have
exceeded 1 million (SAAR) units. These high levels will
likely make 2003 a record-setting year.

Single-family permits hit a 43-year high and set a new
quarterly record. Permits were up from both the second
quarter of 2003 and the third quarter of 2002. Single-
family permits accounted for over 1.4 million housing
units in the third quarter, up seven percent from the
second quarter and up 10 percent from the third quarter
of 2002. Conversely, manufactured housing producers
continue to show some of the lowest shipment levels in
more than 40 years, shipping on average 133,000 (SAAR)
units over the first nine months of the year.

New home prices decreased slightly in the third quarter
of 2003. The median price of a new single-family home was
$189,900 - one percent below the previous quarter but 7
percent above the third quarter of 2002. The average
price of new homes was $247,200 in the third quarter, up
three percent from the second quarter and up 13 percent
from the third quarter of 2002.

In the third quarter of 2003, housing affordability
worsened slightly in comparison to the first and second
quarters, where housing affordability was at its highest
value ever. Slightly higher interest rates and
significantly higher home prices are the cause for this
decline, although income growth lessened the decline.

Meanwhile, the multifamily market is not experiencing as
much success. Production is down, absorption of new
rental units is sluggish, and the vacancy rate is at an
all-time high of 9.9 percent; an increase of nearly one
percentage point from the third quarter of 2002. Permits
and completions are down from the second quarter and down
from the third quarter of 2002. Market absorption of new
rental units stands at 66 percent of new apartments
leased within the first three months following
completion. This is the lowest quartile of absorption
rates recorded in the past 30 years.

Local housing market profiles are available for the
following cities:

o Asheville, North Carolina
o Bergen-Passaic, New Jersey
o Boston, Massachusetts
o Chicago, Illinois
o Fresno, California
o Honolulu, Hawaii
o Houston, Texas
o New York, New York
o Pueblo, Colorado
o Wichita, Kansas

The current issue of "U.S. Housing Market Conditions" is
available on the Web at
https://www.huduser.gov/periodicals/ushmc.html

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