National Housing Market Conditions, 4th Quarter 2016

March 28, 2017  

National Housing Market Conditions, 4th Quarter 2016

HUD’s Office of Policy Development and Research has released its analysis of the national housing market with fourth quarter statistics for 2016. The report contains updates on production, marketing, housing performance, homeownership, and affordability; provides comparisons with the previous quarter; and places the data in historical context. The analysis indicates that during the fourth quarter of 2016, the factors indicating housing market recovery were mixed.

Key Findings

• Construction starts on single-family homes were up 10 percent from the third quarter and 10 percent from one year before. As of the fourth quarter, the pace of single-family housing starts was nearly two-thirds the annual rate of 1.36 million units in 2002, before the housing bubble began. Multifamily housing starts rose 9 percent from the third quarter and 10 percent from one year earlier.
• Purchases of new single-family homes were down 4 percent from the third quarter but up 10 percent from one year earlier. Sales of existing homes were up 3 percent from the third quarter and up 7 percent from one year before. The NAR Composite Housing Affordability index rose to 166.2, up from 163.6 in the third quarter, and remains well above its historic norm of 129.
• The rate of seriously delinquent loans rose to 3.13 percent in the fourth quarter, from 2.96 percent in the third quarter, when it was at its lowest rate since 2007.
• The U.S. homeownership rate increased to 63.7 percent, up from 63.5 percent in the third quarter, but was still down slightly from 63.8 percent one year before.
• HUD’s Rental Affordability Index shows that the affordability of renting a home improved by 1 percent from one year earlier but decreased 2 percent from the third quarter as the median monthly price of renting a home rose 2 percent while median renter household income increased by only 0.5 percent.

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