HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 849,000 units at a seasonally adjusted annual rate (SAAR) in the first quarter of 1998, up a statistically insignificant 2 percent from the previous quarter and a statistically insignificant 3 percent above the first quarter of 1997. The number of new homes for sale at the end of March 1998 numbered 286,000 units, unchanged from the last quarter and up a statistically insignificant 1 percent from the first quarter of 1997. At the end of March, inventories represented a 4.3 months' supply at the current sales rates, down a statistically insignificant 2 percent from the fourth quarter of 1997 and down a statistically insignificant 2 percent from the first quarter of 1997.

Sales of existing single-family homes for the first quarter of 1998 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 4,687,000 (SAAR), up 7 percent from the fourth quarter of 1997 and up 14 percent from the first quarter of 1997. The number of units for sale at the end of the first quarter was 2,480,000, 54 percent above the previous quarter and 6 percent above the first quarter of 1997. At the end of the first quarter, a 6.1 months' supply of units remained, 39 percent above the previous quarter but 9 percent below the first quarter of 1997.

*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 first quarter of 1998 was $152,200, up 6 percent from the previous quarter's level and above the first quarter of 1997 by 5 percent. The average price of new homes sold during the first quarter of 1998 was $180,600 up a statistically insignificant 3 percent from the fourth quarter of 1997 and up 5 percent from the first quarter a year ago. The price adjusted to represent a constant-quality house was $174,400 a statistically insignificant 2 percent increase from the fourth quarter of 1997 and up a statistically insignificant 4 percent from the first quarter of 1997. The values for the set of physical characteristics used for the constant-quality house are based on 1992 sales.

The median price of existing single-family homes in the first quarter of 1998 was $125,900, 1 percent above last quarter but 5 percent above the first quarter of 1997, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of $156,000 was unchanged from the previous quarter but 6 percent above the first quarter of 1997.

**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 first quarter of 1998 shows that families earning the median income have 134.5 percent of the income needed to purchase the median-priced existing home. This figure is 3 percent above the fourth quarter of 1997 and 3 percent higher than the first quarter of 1997.

This increase in the housing affordability index is the result of a 25 basis point decrease in the effective mortgage interest rate and a 1 percent rise in median family income, which more than offset a 1 percent increase in the median home price during the last quarter.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 55,800 new, unsubsidized, unfurnished multifamily (5 or more units in structure) rental apartments completed in the fourth quarter of 1997, up a statistically insignificant 9 percent from the previous quarter and 29 percent from the fourth quarter of 1996. Of the apartments completed in the fourth quarter of 1997, 71 percent were rented within 3 months. This absorption rate is a statistically insignificant 3 percent below the previous quarter and a statistically insignificant 1 percent above the same quarter in 1996. The median asking rent for apartments completed in the fourth quarter was $713, which is a statistically insignificant 2 percent below the previous quarter but a statistically insignificant 3 percent higher than 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 on site ready for occupancy in the fourth quarter of 1997 totaled 287,000 units at a seasonally adjusted annual rate, a statistically insignificant 1 percent below the level of the previous quarter but 13 percent below the fourth quarter of 1996. The number of homes for sale on dealers' lots at the end of the fourth quarter of 1997 totaled 144,000 units, 8 percent above the previous quarter and 30 percent above the same quarter of 1996. The average sales price of the units sold in the fourth quarter of 1997 was $43,100, a statistically insignificant 3 percent above the previous quarter and 10 percent above the fourth-quarter 1996 price. In the year 1997, the average price was $41,100, an increase of 7 percent over 1996. 297,000 mobile homes were placed in 1997, 7 percent fewer than in the previous year.

*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 (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 first-quarter value for the index of current market activity for single-family detached houses stood at 69, up 7 points from the fourth quarter and 12 points from 1997's first quarter. The index for future sales expectations, 72, was up 5 points from the fourth-quarter value and 6 points from 1997's level. Prospective buyer traffic had an index value of 51, which is 8 points above the fourth-quarter value and 6 points above 1997's first quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the first quarter, this index stood at 65, which is 7 points above the fourth-quarter level and 10 points above the value in 1997.

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