HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 920,000 units at a seasonally adjusted annual rate in the fourth quarter of 2000, up a statistically insignificant 2 percent from the previous quarter and up a statistically insignificant 2 percent from the fourth quarter of 1999. The number of new homes for sale at the end of December 2000 was 310,000 units, unchanged from the last quarter but down a statistically insignificant 3 percent from the fourth quarter of 1999. At the end of December, inventories represented a 3.9 months’ supply at the current sales rate, down a statistically insignificant 5 percent from the end of the previous quarter and down 9 percent from the fourth quarter of 1999. The number of new houses sold in 2000 was 898,000, down a statistically insignificant 1 percent from 1999. The number of houses for sale in 2000 was down a statistically insignificant 4 percent from 1999.

Sales of existing single-family homes for the fourth quarter of 2000 reported by the NATIONAL ASSOCIATION OF REALTORS ^® totaled 5,043,000 (SAAR), down 1 percent from the third quarter of 2000 but unchanged from the fourth quarter of 1999. The number of units for sale at the end of the fourth quarter was 1,600,000, 6 percent below the previous quarter but 7 percent above the fourth quarter of 1999. At the end of the fourth quarter, a 3.9 months’ supply of units remained, 3 percent below the previous quarter but 11 percent above the fourth quarter of 1999. The year 2000 saw 5,031,000 existing houses being sold, down 3 percent from last year. The number for sale at the end of 2000 was 1,600,000. This was up 7 percent from the end of 1999.

*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 2000 was $169,000, unchanged from the previous quarter’s level but above the third quarter of 2000 by 2 percent. The average price of new homes sold during fourth quarter of 2000 was $210,200, up a statistically insignificant 3 percent from the third quarter and up a statistically insignificant 2 percent from the fourth quarter of a year ago. The price adjusted to represent a constant-quality house was $195,500, up a statistically insignificant 2 percent from the third quarter of 2000 and up 6 percent from the fourth quarter of 1999. The values for the set of physical characteristics used for the constant-quality house are based on 1992 sales. The median price of new homes for 2000 was $168,000, up 5 percent from last year. The average price of $205,700 was up 5 percent over the 1999 average, and the price of a constant-quality house was $191,300 in 2000, up 4 percent above last year’s price.

The median price of existing single-family homes in the fourth quarter of 2000 was $139,400, down 2 percent from the third quarter but 5 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS ^® . The average price of existing homes was $177,800, down 1 percent from the previous quarter but up 6 percent from the third quarter of 1999.

**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 2000 shows that families earning the median income have 133.0 percent of the income needed to purchase the median-priced existing home. This figure is up 7 percent from the third-quarter 2000 index but down 1 percent from the fourth quarter of 1999. For the year 2000 the composite index was at a rate of 131.0, a decrease of 7 percent.

The fourth quarter decline 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 29 basis points from the previous quarter to an interest rate of 7.81 percent, while the median price of existing single-family homes decreased 2.3 percent in the fourth quarter. The median family income rose 1 percent during the fourth quarter of 2000. The annual data for 2000 indicates that the median price of single-family homes rose by 4 percent and the median family income increased by 5 percent. While the annual average home mortgage interest rate rose from last year, the fourth-quarter average rate dropped below the 8- to 8.25-percent range that had existed the first three quarters of the year.

The fixed-rate index increased from the third quarter 2000 index and was up 2 percent from the fourth quarter of 1999. The 2000 annual fixed rate index declined 5 percent to 129.6.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 67,400 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the third quarter of 2000, up 18 percent from the previous quarter and up a statistically insignificant 3 percent from the third quarter of 1999. Of the apartments completed in the third quarter of 2000, 74 percent were rented within 3 months. This absorption rate is unchanged from the previous quarter but 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 $844, which is a statistically insignificant 3 percent below the previous quarter but 9 percent above 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 onsite ready for occupancy in the third quarter of 2000 totaled 254,000 at a seasonally adjusted annual rate, 9 percent below the level of the previous quarter and 11 percent below the third quarter of 1999. The number of homes for sale on dealers’ lots at the end of the third quarter totaled 114,000 units, 3 percent below the previous quarter but 2 percent above the same quarter of 1999. The average sales price of the units sold in the third quarter was $47,400, a statistically insignificant 3 percent above the previous quarter and 8 percent above the third-quarter 1999 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^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 68, up 2 points from the third quarter but down 11 points from 1999’s fourth quarter. The index for future sales expectations, 69, was unchanged from the third-quarter value but was down 12 points from 1999’s level. Prospective buyer traffic had an index value of 45, which is up 2 points from the third-quarter value but down 5 points from 1999’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 62, which is up 2 points from the third-quarter level but down 10 points from the value in 1999.

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