Home Sales*

Sales of new single-family homes totaled 881,000 units at a seasonally adjusted annual rate (SAAR) in the third quarter of 2001, down a statistically insignificant 1 percent from the previous quarter but up a statistically insignificant 1 percent from the third quarter of 2000. The number of new homes for sale at the end of September 2001 was 306,000 units, up a statistically insignificant 2 percent from the past quarter and up a statistically insignificant 2 percent from the third quarter of 2000. At the end of September, inventories represented a 4.4 months’ supply at the current sales rate, up a statistically insignificant 5 percent from the end of the previous quarter and up a statistically insignificant 7 percent from the third quarter of 2000.

Sales of existing single-family homes for the third quarter of 2001 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,210,000 (SAAR), down 2 percent from the second quarter of 2001 but up 3 percent from the third quarter of 2000. The number of units for sale at the end of the third quarter was 2,190,000, 1 percent above the previous quarter and 10 percent above the third quarter of 2000. At the end of the second quarter, a 5.4 months’ supply of units remained, 10 percent above the previous quarter and 17 percent above the third quarter of a year ago.

Home Prices

The median price of new homes during the third quarter of 2001 decreased to $170,000, down 5 percent from the previous quarter, but rose above the third quarter of 2000 by a statistically insignificant 1 percent. The average price of new homes sold during the third quarter of 2001 was $203,600, down 4 percent from the second quarter of 2001 but unchanged from the third quarter a year ago.

The median price of existing single-family homes in the third quarter of 2001 was $151,200, 3 percent higher than the second quarter of 2001 and 6 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of existing homes, $190,300, increased 3 percent from the previous quarter and was 6 percent greater than the third quarter of 2000.

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 third quarter of 2001 shows that families earning the median income have 137.2 percent of the income needed to purchase the median-priced existing home. This figure is down 1 percent from the second-quarter 2001 index but up 10 percent from the third quarter of 2000.

The third-quarter decrease 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 9 basis points from the previous quarter to an interest rate of 7.06 percent. A year ago the average mortgage rate was 8.10 percent. The median price of existing single-family homes increased 3.0 percent from the second quarter of 2001, while the median family income rose 1.2 percent from the previous quarter.

The fixed-rate index decreased 1 percent from the second-quarter 2001 index but was up 10 percent from the third quarter of 2000.

Apartment Absorptions

There were 46,300 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the second quarter of 2001, up a statistically insignificant 8 percent from the previous quarter but down 18 percent from the second quarter of 2000. Of the apartments completed in the second quarter of 2001, 65 percent were rented within 3 months. This absorption rate is a statistically insignificant 2 percent below the previous quarter and 11 percent below the same quarter in the previous year. The median asking rent for apartments completed in the second quarter was $873, which is a statistically insignificant 2 percent below the previous quarter but unchanged from a year earlier.

Manufactured (Mobile) Home Placements

Manufactured homes placed onsite ready for occupancy in the second quarter of 2001 totaled 183,000 at a seasonally adjusted annual rate, a statistically insignificant 1 percent below the level of the previous quarter and 34 percent below the second quarter of 2000. The number of homes for sale on dealers’ lots at the end of the second quarter totaled 65,000 units, a statistically insignificant 2 percent below the previous quarter and 18 percent below the same quarter of 2000. The average sales price of the units sold in the second quarter was $48,700, a statistically insignificant 2 percent above the previous quarter and 6 percent above the second quarter 2000 price.

Builders' Views of Housing Market Activity

The National Association of Home Builders™ (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 third-quarter value for the index of current market activity for single-family detached houses stood at 63, up 1 point from the second quarter but down 3 points from 2000’s third quarter. The index for future sales expectations, 65, was down 1 point from the second-quarter value and down 4 points from 2000’s level. Prospective buyer traffic had an index value of 41, which is down 1 point from the second-quarter value and down 2 points from 2000’s third-quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the third quarter, this index stood at 57, which is unchanged from the second-quarter level but down 3 points from the value in 2000. The October value for the composite index (48) shows that builders are even less optimistic about current sales, expected future sales, and prospective buyer traffic than they were in the third quarter.