Recently Released: U.S. Housing Market Conditions, 2nd Quarter 2003

HUD's Office of Policy Development & Research (PD&R) has
just released the latest issue of "U.S. Housing Market
Conditions," summarizing activity in the housing market
through the second 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 eleven local markets across the country and presents
historical data in summary tables. Results from the
report are summarized below.

The second quarter of 2003 continued to show very high
levels of production in the housing sector (based on
permits, starts, completion records, and sales activity),
particularly in the single-family market. These levels
were slightly higher than those seen during the first
quarter of 2003 and the second quarter of 2002. With
mortgage interest rates and affordability conditions more
favorable than in the past 30-40 years, more American
families can afford to purchase houses. Presently, new
and existing sales are at or near record-setting levels.

Meanwhile, the multifamily market had reasonable levels
of production in the second quarter, but is not seen as
expanding. The absorption rate of new rental apartments
recovered slightly during the second quarter, but is
still low by historic standards, while the rental vacancy
rate continues to rise to record levels.

Total and single-family permits were up from both the
first quarter of 2003 and the second quarter of 2002.
Starts of housing, including total and single-family
starts, either remained unchanged or fell slightly in
comparison to first quarter levels. Both remain at
historically high levels. Similarly, both total and
single-family completions rose in comparison to the
previous quarter and second quarter of 2002. The
manufactured housing industry, however, continued to
display some of the lowest shipment levels in more than
40 years.

Housing marketing and sales were very strong in the
second quarter of 2003, with record and near-record
sales. New home prices increased in the second quarter of
2003. The median price of a new single-family home was
$189,300; 2 percent above the previous quarter and 1
percent above the second quarter of 2002. According to
data from the National Association of Realtors (NAR),
existing home prices increased in comparison to  first
quarter sales figures.. The median price for an existing
home was $168,900 in the second quarter of 2003, 5
percent higher than the first quarter and up 7 percent
from the second quarter of 2002. Inventories of homes
available for sale are still reasonable at 3.6 months for
new homes and 5.1 months for existing homes.

In the second quarter of 2003, housing affordability was
nearly the same as in the record-setting previous
quarter, according to housing affordability indices
published by NAR. Although interest rates continue at
record lows and family incomes are increasing, albeit
slowly, these influences were negated by increases in
home prices.

The multifamily (over 5 units) sector saw reasonable
production, with permits up slightly, starts down
slightly, and completions unchanged. However, signs of
weakness remain in the multifamily market. Market
absorption of new apartment units increased from the
previous quarter, but is still historically low, with 4
in 10 new rentals on the market for 3 months without
being leased. Not only are new units remaining vacant,
but the rental vacancy rate is also at a record high of
9.6 percent.

Local housing market profiles are available for the
following cities:

o Albany-Schenectady-Troy, New York
o Allentown-Bethlehem-Easton, Pennsylvania
o Boise City, Idaho
o Cincinnati, Ohio
o Denver-Boulder, Colorado
o Des Moines, Iowa
o Greenville-Spartanburg, South Carolina
o Janesville-Beloit, Wisconsin
o Los Angeles, California
o Orlando, Florida
o Reading, Pennsylvania

The current issue of "U.S. Housing Market Conditions" is
available on the Web at
https://www.huduser.gov/periodicals/USHMC/summer03/index.html
or in printed form for a nominal charge by calling
HUD USER at 1-800-245-2691.
--------------------------------------
Please contact HUD USER at:
HUD USER
P.O. Box 23268
Washington, DC 20026-3268
1-800-245-2691
1-800-927-7589 (TDD)
202-708-9981 (fax)
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