Housing continues to be a bright spot in the
national economy. Housing production and marketing
are at high levels, although there is some
retrenchment from 2001's recordsetting pace.
American families can still easily afford homeownership,
and the homeownership rate is still at
a historically high level. Affordability and homeownership
rates in the first quarter of 2002 are
down slightly from last quarter but are still near
recently set record rates. The multifamily market
is one area for possible concern: Most indicators
show signs of weakness compared with the fourth
and first quarters of 2001.
Housing production posted a strong first quarter,
particularly in January and February, which may
be attributable to unseasonably favorable weather.
Singlefamily and total permits and starts were
strong in the first quarter and posted gains from
the fourth quarter of 2001. Completions were
slightly lower than those from the fourth quarter
of 2001, although singlefamily completions were
slightly ahead. The manufactured housing sector
continues to ship fewer than 200,000 seasonally
adjusted annual rate (SAAR) units.
 Builders took out permits for 1,698,000 (SAAR)
new housing units in the first quarter of 2002,
which is up 8 percent from the fourth quarter of
2001 and up 2 percent from the first quarter of
2001. Singlefamily permits were taken out for
1,317,000 (SAAR) housing units in the first quarter,
up 10 percent from the fourth quarter of 2001
and up 6 percent from the first quarter of 2001.
Much of this strength was experienced in January
and February, when the weather was unseasonably
favorable.
 In the first quarter of 2002, construction was
started on 1,715,000 (SAAR) housing units, which
is 9 percent above the fourth quarter of 2001 and
5 percent above the first quarter of 2001. Single family
starts reached 1,373,000 (SAAR) in the
first quarter, which is 9 percent ahead of the
fourth quarter of 2001 and 7 percent ahead of
the first quarter of 2001. As with permits, high
numbers of starts were posted for January and
February.
 Housing unit completions reached 1,604,000
(SAAR) units in the first quarter of 2002, which
is down 1 percent from the fourth quarter of
2001 but up 9 percent from the first quarter of
2001. Singlefamily completions were recorded
for 1,327,000 (SAAR) units, which is 1 percent
above 2001's fourthquarter level and 14 percent
above the first quarter of 2001.
 Shipments of manufactured homes in the first
quarter totaled 181,000 (SAAR), which is 12 percent
lower than shipments in the fourth quarter
of 2001 but 2 percent higher than in the first
quarter of 2001. Shipments continue to be low,
especially when compared with the heady days
of the mid1990s.
Housing marketing and sales were strong in the
first quarter of 2002, although new home sales were
off from the fourthquarter 2001 pace. Existing
home sales set a monthly record in January. Prices
increased for new and existing homes, with the
median price for new homes posting a 7percent
gain, and the median price for existing homes posting
a 2percent gain. Inventories are increasing but
still reasonable compared with sales. Finally, homebuilders
are optimistic about the future.
 Builders sold 879,000 (SAAR) new singlefamily
homes in the first quarter of 2002, which is down
5 percent from the fourth quarter of 2001 and
down 7 percent from the first quarter of 2001.
This is a very high level of new home sales: any
concern about the decline should be tempered by
recalling that 2001 was a recordsetting year.
 REALTORS^{®} sold 5,780,000 (SAAR) homes in the
first quarter of 2002, which is 10 percent above
the fourth quarter of 2001 and 9 percent above
the first quarter of 2001. In January, REALTORS^{®}
sold a record number of homes—more than 6
million on a seasonally adjusted annual basis—and in February they posted a nearrecord 5.9
million (SAAR) sales.
 New home prices increased in the first quarter of
2002. The median price of a new singlefamily
home was $182,700, 7 percent higher than the
fourth quarter of 2001 and 8 percent higher than
the first quarter of 2001. The average price was
$224,400, which is 5 percent above the fourth
quarter of 2001 and 6 percent above the first
quarter of 2001.
 Existing home prices also posted increases in
2002's first quarter. The median price of an
existing home was $150,900, which is 2 percent
above the fourth quarter of 2001 and 8 percent
above the first quarter of 2001. The average price
was $190,900, which is 3 percent above the last
quarter and 8 percent above the first quarter of
2001.
 Inventories of new and existing homes increased
in the first quarter of 2002, although they remain
reasonable compared with sales activity, that is,
less than 5 months of sales. At the end of the
first quarter there were 311,000 new homes
available for sale, which is 1 percent higher than
at the end of the fourth quarter and 8 percent
higher than at the end of the first quarter of
2001. When expressed in terms of current sales
levels, the inventory at the end of the first quarter
would support 4.3 months of sales, up from
the 3.7 months posted at the ends of both the
fourth and first quarters of 2001. The inventory of
existing homes available for sale at the end of the
first quarter was 2,160,000, which is 17 percent
higher than at the end of the fourth quarter of
2001 and 10 percent higher than at the end of the
first quarter of 2001. The inventory of existing
homes represents 4.8 months of sales, which is
up from 2001's fourthquarter value of 4.2
months and firstquarter value of 4.4 months.
 The National Association of Home Builders^{TM}
Housing Market Index indicates that builders
are more upbeat than they were in the fourth
and first quarters of 2001. The composite index
was 59 points in the first quarter, which is up
from 51 points in the fourth quarter of 2001 and
from 57 points in the first quarter of 2001. Their
optimism is due to improved views of current
sales, expectations about future sales, and
prospective buyer traffic.
Housing affordability declined slightly in the first
quarter but remains at very favorable levels, according
to the affordability indexes published by the
NATIONAL ASSOCIATION OF REALTORS^{®}.
Interest rates, although rising, remain below 7 percent;
family incomes increased slightly; and home
price increases were moderate. The composite index
indicates that a family earning the median income
and purchasing the medianpriced existing home had
137.3 percent of the income needed to support the
mortgage, according to standard lending guidelines.
This is down 3.7 percentage points from the fourth
quarter of 2001 and down 2.9 percentage points from
the first quarter of 2001. This affordability decline
results from the 1.6percent increase in the median
price of an existing house and the 15basispoint
increase in the mortgage interest rate, offsetting the
0.5percent increase in the median family income.
The historically low interest rate continues to provide
the major impetus for favorable affordability
levels and high homeownership rates. The homeownership
rate in the first quarter was 67.8 percent,
which is a very high rate, although it is off from the
fourth quarter's recordsetting rate of 68.0 percent.
Multifamily (5 or more units) housing market conditions
are not as favorable as in the singlefamily
sector, with worsening in all market indicators—permits are down, starts are unchanged, completions
have decreased, apartment absorptions have
declined, and vacancies have increased.
 Permits were issued for 306,000 (SAAR) multifamily
units in the first quarter of 2002, which
is 2 percent lower than in the fourth quarter and
16 percent below the first quarter of 2001.
 Multifamily housing starts totaled 288,000
(SAAR) units in the first quarter of 2002, which
is nearly equal to the level in the fourth quarter
of 2001 but down 8 percent from the first quarter
of 2001.
 There were 251,000 multifamily completions in
the first quarter of 2002, down 7 percent from the
fourth quarter of 2001 and down 12 percent from
the first quarter of 2001.
 There were 46,800 apartments completed in the
fourth quarter of 2001, and 59 percent were leased
by the end of the first quarter of 2002. This new
apartment absorption rate declined from the 65
percent leaseup rate in the fourth quarter of 2001
and the 67percent leaseup rate in the first quarter
of 2001.
 Rental vacancy rates averaged 9.1 percent in the
first quarter, which is up from the fourthquarter
vacancy rate of 8.8 percent and the 8.2percent
rate of the first quarter of 2001.
HOUSING IN AMERICA: 2001 AMERICAN
HOUSING SURVEY RESULTS
