Home Sales*

Sales of new single-family homes totaled 1,089,000 units at a seasonally adjusted annual rate (SAAR) in the second quarter of 2003, up 11 percent from the previous quarter and up 14 percent from the second quarter of 2002. The number of new homes for sale at the end of June 2003 was 345,000 units, up a statistically insignificant 1 percent from the past quarter and up 5 percent from the second quarter of 2002. At the end of June inventories represented a 3.6 months’ supply at the current sales rate, down 12 percent from the end of the previous quarter and down 14 percent from the second quarter of last year.

Sales of existing single-family homes for the second quarter of 2003 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,827,000 (SAAR), down 1 percent from the first quarter of 2003 but up 5 percent from the second quarter of 2002. The number of units for sale at the end of the second quarter of 2003 was 2,500,000, 12 percent above the previous quarter and 11 percent above the second quarter of 2002. At the end of the second quarter, a 5.1 months’ supply of units remained, 9 percent more than the previous quarter and unchanged from the second quarter a year ago.

Home Prices

The median price of new homes during the second quarter of 2003 increased to $189,300, up a statistically insignificant 2 percent from the previous quarter and up a statistically insignificant 1 percent from the second quarter of 2002. The average price of new homes sold during the second quarter of 2003 was $241,700, up 4 percent from the first quarter of 2003 and up 6 percent from the second quarter a year ago. The price adjusted to represent a constant-quality house was $215,000, virtually unchanged from the first quarter of 2003 but up 4 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 2003 was $168,900, up 5 percent from the first quarter of 2003 and up 7 percent from the second quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of existing homes, $215,600, increased 6 percent from the previous quarter and was 7 percent greater than in the second quarter of 2002.

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 second quarter of 2003 shows that families earning the median income have 143.5 percent of he income needed to purchase the median-priced existing home. This figure is nearly unchanged from the first-quarter 2003 index but up 9 percent from the second quarter of 2002.

The second-quarter housing affordability index reflexes current conditions in the marketplace. Although the national average home mortgage interest rate for existing single-family homes has decreased 32 basis points from the previous quarter to an interest rate of 5.58 percent, the median price of existing single-family homes increased to $168,867, a gain of 4.8 percent from the first quarter of 2003 and an increase of 7.0 percent from the second quarter of 2002. The median family income rose just 0.7 percent from the previous quarter and 2.6 percent from last year’s second quarter.

The fixed-rate index was unchanged from the first-quarter 2003 index but increased 11 percent from the second quarter of 2002.

Apartment Absorptions

There were 37,700 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the first quarter of 2003, down a statistically insignificant 21 percent from the previous quarter and down a statistically insignificant 1 percent from the first quarter of 2002. Of the apartments completed in the first quarter of 2003, 59 percent were rented within 3 months. This absorption rate is a statistically insignificant 5 percent above the previous quarter but a statistically insignificant 2 percent below the same quarter of the previous year. The median asking rent for apartments completed in the first quarter was $897, which is a statistically insignificant 3 percent below the previous quarter and a statistically insignificant 1 percent below a year earlier.

Manufactured (Mobile) Home Placements

Manufactured homes placed onsite ready for occupancy in the first quarter of 2003 totaled 133,000 at a seasonally adjusted annual rate, 14 percent below the level of the previous quarter and 23 percent below the first quarter of 2002. The number of homes for sale on dealers’ lots at the end of the first quarter totaled 50,000 units, 6 percent below the previous quarter and 22 percent below the same quarter of 2002. The average sales price of the units sold in the first quarter was $53,300, a statistically insignificant 2 percent above the previous quarter and 5 percent above the first-quarter 2002 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 indexes of housing market activity. (The index values range from 0 to 100.) The second-quarter 2003 value for the index of current market activity for single-family detached houses stood at 62, down 4 points from the first quarter and down 3 points from 2002’s second quarter. The index for future sales expectations, 67, was up 4 points from the first-quarter value but down 2 points from 2002’s level. Prospective buyer traffic had an index value of 41, which is down 2 points from the first-quarter value and down 3 points from 2002’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 57, down 2 points from the first-quarter level and down 3 points from the value in 2002.