Home Sales*

Sales of new single-family homes totaled 976,000 units at a seasonally adjusted annual rate (SAAR) in the second quarter of 2002, up 8 percent from the previous quarter and up 10 percent from the second quarter of 2001. The number of new homes for sale at the end of June 2002 was 325,000 units, up a statistically insignificant 3 percent from the past quarter and up 8 percent from the second quarter of 2001. At the end of June, inventories represented a 3.9 months’ supply at the current sales rate, down a statistically insignificant 7 percent from both the end of the previous quarter and the second quarter of last year.

Sales of existing single-family homes for the second quarter of 2002 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,527,000 (SAAR), down 4 percent from the first quarter of 2002 but up 4 percent from the second quarter of 2001. The number of units for sale at the end of the second quarter of 2002 was 2,200,000, 5 percent above the previous quarter and 2 percent above the second quarter of 2001. At the end of the second quarter, a 5.2 months’ supply of units remained, 11 percent more than the previous quarter and 6 percent above the first quarter a year ago.

Home Prices

The median price of new homes during the second quarter of 2002 decreased to $182,400, down 3 percent from the previous quarter but up a statistically insignificant 2 percent from the second quarter of 2001. The average price of new homes sold during the second quarter of 2002 was $225,100, down a statistically insignificant 1 percent from the first quarter of 2002 but up 7 percent from the second quarter a year ago. The price adjusted to represent a constant-quality house was $206,300, down a statistically insignificant 1 percent from the first quarter of 2002 but up a statistically insignificant 3 percent from the second quarter a year ago. The values for the set of physical characteristics used for the constant-quality house are based on 1996 sales.

The median price of existing single-family homes in the second quarter of 2002 was $157,700, 4 percent higher than the first quarter of 2002 and 7 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of existing homes, $202,400, increased 6 percent from the previous quarter and was 9 percent greater than in the second quarter of 2001.

Housing Affordability

Housing affordability is the ratio of median family income to the income needed to purchase the medianpriced home based on current interest rates and underwriting standards, expressed as an index. The NATIONAL ASSOCIATION OF REALTORS^® composite index value for the second quarter of 2002 shows that families earning the median income have 132.6 percent of the income needed to purchase the median-priced existing home. This figure is down 3 percent from the first-quarter 2002 index and down 2 percent from the second quarter of 2001.

The second-quarter 2002 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 decreased 4 basis points from the previous quarter to an interest rate of 6.82 percent. The median price of existing single-family homes increased 4.4 percent from the first quarter of 2002 and rose 7.4 percent from the second quarter of 2001. The median family income rose just 0.5 percent from the previous quarter and 2.1 percent from last year’s second quarter.

The fixed-rate index decreased 4 percent from the first-quarter 2002 index and decreased 3 percent from the second quarter of 2001.

Apartment Absorptions

There were 38,000 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the first quarter of 2002, down 19 percent from the previous quarter and down a statistically insignificant 12 percent from the first quarter of 2001. Of the apartments completed in the first quarter of 2002, 60 percent were rented within 3 months. This absorption rate is a statistically insignificant 2 percent above the previous quarter but 8 percent below the same quarter of the previous year. The median asking rent for apartments completed in the first quarter was $910, which is 8 percent above the previous quarter and a statistically insignificant 2 percent above a year earlier.

Manufactured (Mobile) Home Placements

Manufactured homes placed onsite ready for occupancy in the first quarter of 2002 totaled 168,000 at a seasonally adjusted annual rate, 10 percent below the level of the previous quarter and 13 percent below the first quarter of 2001. The number of homes for sale on dealers’ lots at the end of the first quarter totaled 65,000 units, 5 percent above the previous quarter and 12 percent above the same quarter of 2001. The average sales price of the units sold in the first quarter was $49,600, a statistically insignificant 2 percent above the previous quarter and 6 percent above the first-quarter 2001 price.

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 indexes of housing market activity. (The index values range from 0 to 100.) The second-quarter value for the index of current market activity for single-family detached houses stood at 65, up 1 point from the first quarter of 2001 and up 3 points from 2001’s second quarter. The index for future sales expectations, 69, was up 1 point from the first-quarter value and up 3 points from 2001’s level. Prospective buyer traffic had an index value of 44, which is down 3 points from the first-quarter value but up 2 points from 2001’s second-quarter level. NAHB combines these separate indexes into a single housing market index that mirrors the three components quite closely. In the second quarter, this index stood at 60, which is up 1 point from the first-quarter level and up 3 points from the value in 2001.