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Just Released: U.S. Housing Market Conditions, 1st Quarter 2004

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HUD's Office of Policy Development & Research (PD&R) has
just released the 1st quarter 2004 issue of "U.S. Housing
Market Conditions," which contains a compilation of
statistical data and written reports on national trends
in housing production, marketing, finance, investment,
and inventory. In addition, an analysis of economic and
housing market trends are presented for ten geographical
regions, each including a profile on a selected housing
market. To keep things fresh, every issue also includes a
topical piece about a noteworthy aspect of housing
activity. The new edition features a discussion of the
expanding market for second homes.

The pace of housing production was exceptionally robust
in the first quarter of 2004, reaching levels not
experienced in the past two to three decades. Builders
took out permits at a seasonally adjusted annual rate
(SAAR) of over 1.9 million housing units; more than 1.5
million for single-family alone. This represents the
highest quarterly figure in the history of single family
permits. And while the figure is up only slightly from
the fourth quarter of 2003, it represents a 13 percent
jump over the numbers reported in the first quarter 2003.
Housing sales were also at very high levels during the
first three months of 2004, when more than 7 million
homes were sold. Builders sold 1,166,000 (SAAR) new
single-family homes, up 4 percent from the fourth quarter
of 2003 and 18 percent from the same period last year;
another new quarterly record. Realtors sold 6,203,000
(SAAR) existing homes, down 1 percent from the fourth
quarter of 2003 but up 6 percent from the same period
last year. The median price for a new home was up, but
the price for an existing home was down slightly in
comparison to the previous quarter.

Amid the record-setting levels of housing production,
manufactured housing is experiencing the lowest level of
shipments in 45 years. Shipments of new manufactured
housing units equaled 126,000 (SAAR), unchanged from the
previous quarter but down 7 percent from the same period
in 2003.

Housing affordability improved in the first quarter of
2004, when lower interest rates and home prices, combined
with higher incomes, pushed the affordability index to
144.2 points. This represents a 0.5 point increase over
the fourth quarter of 2003. The record 68.6 percent
homeownership rate set in the fourth quarter of 2003 was
maintained in the first quarter of 2004.

Production of multifamily units was high, but high
vacancy rates persist in the rental market. In the first
quarter of 2004, 256,000 new multifamily housing units
were completed, up 11 percent from the previous quarter,
but down 13 percent from the first quarter of 2003. A
record 10.4 percent of rental units were vacant; the
highest vacancy rate in history. Although by just two-
tenths, this exceeds the previous record of 10.2 percent
set in the fourth quarter of 2003, but is a full
percentage point higher than the vacancy rate seen in the
first quarter of 2003. Market absorption of new rental
units stands at 69 percent of new apartments leased
within the first three months following completion, up 23
percent from the fourth quarter and up 21 percent from
the first quarter of 2003.

In addition to a special discussion on the challenges of
measuring the second homes market (which studies indicate
is booming and will likely reach epic proportions in the
near future) this edition of U.S. Housing Market
Conditions contains local housing market profiles for the
following cities:

o Bellingham, Washington
o Eagle County, Colorado
o Fort Wayne, Indiana
o McAllen-Edinburg-Mission, Texas
o Morgantown, West Virginia
o Nassau-Suffolk, New York
o Sacramento, California
o Salem, Oregon
o San Francisco Bay Area, California
o York, Pennsylvania

The current issue of "U.S. Housing Market Conditions" is
available as a free download from HUD USER at
https://www.huduser.gov/periodicals/ushmc.html
or in printed form for a nominal charge by calling
1-800-245-2691.

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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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