HOUSING MARKETING
Home Sales*
Sales of new singlefamily homes totaled 967,000 units at a seasonally adjusted annual rate (SAAR) in the fourth quarter of 1998, up 13 percent from the previous quarter and 17 percent above the fourth quarter of 1997. The number of new homes for sale at the end of December 1998 numbered 297,000 units, up a statistically insignificant 2 percent from the last quarter and up a statistically insignificant 5 percent from the fourth quarter of 1997. At the end of December, inventories represented a 3.7 months' supply at the current sales rates, down to 10 percent from the third quarter of 1998 and down 16 percent from the fourth quarter of 1997. The 1998 annual sales of new singlefamily homes was 888,000 units, the highest number in at least 30 years.
Sales of existing singlefamily homes for the fourth quarter of 1998 reported by the NATIONAL ASSOCIATION OF REALTORS^{®} totaled 4,893,000 (SAAR), up 2 percent from the third quarter of 1998 and up 12 percent from the fourth quarter of 1997. The number of units for sale at the end of the fourth quarter was 1,580,000, 21 percent below the previous quarter and 2 percent below the fourth quarter of 1997. At the end of the fourth quarter, a 3.8 months' supply of units remained, 25 percent below the previous quarter and 14 percent below the fourth quarter of 1997. For 1998, the sales of existing singlefamily homes was 4,785,000 homes, the largest number of annual sales in more than 30 years.
*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 fourth quarter of 1998 was $150,400, down a statistically insignificant 2 percent from the previous quarter's level and above the fourth quarter of 1997 by a statistically insignificant 4 percent. The average price of new homes sold during the fourth quarter of 1998 was $179,400, down a statistically insignificant 3 percent from the third quarter of 1998 and up a statistically insignificant 2 percent from the fourth quarter of a year ago. The price adjusted to represent a constantquality house was $177,300, up a statistically insignificant 1 percent from the third quarter of 1998 and up a statistically insignificant 4 percent from the fourth quarter of 1997. The values for the set of physical characteristics used for a constantquality house are based on 1992 sales. For the year, the median price of new homes was $151,000 and the average price was $181,300.
The median price of existing singlefamily homes in the fourth quarter of 1998 was $131,000, 1 percent below last quarter but 5 percent above the fourth quarter of 1997, according to the NATIONAL ASSOCIATION OF REALTORS^{®}. The average price of $162,900 was down 2 percent from the previous quarter and up 5 percent from the fourth quarter of 1997. In 1998, the median price of existing homes was $130,600 and the average price was $162,900.
**This change is not statistically significant.
^{1}A constantquality 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 medianpriced home based on current interest rates and underwriting standards, expressed as an index. The NATIONAL ASSOCIATION OF REALTORS^{®} composite index value for the fourth quarter of 1998 shows that families earning the median income have 137.8 percent of the income needed to purchase the medianpriced existing home. This figure is 4 percent above the third quarter of 1998 and 5 percent higher than the fourth quarter of 1997.
The increase in the housing affordability index is the result of the median price of singlefamily homes declining from the previous quarter coupled with a rising median family income of 1 percent and a decline of 20 basis points in mortgage interest rates from the third quarter of this year.
The fixedrate index increased 5 percent from the third quarter of 1998 and increased 6 percent from the fourth quarter of 1997. The adjustablerate index increased by 4 percent both from the previous quarter and from the same quarter a year earlier.
All of the 1998 annual indices showed a gain. While the median price of existing houses increased by 5 percent from the previous year, the median family income increased 4 percent and the mortgage interest rates declined by more than onehalf of a percentage point.
Source: NATIONAL ASSOCIATION OF REALTORS^{®} 
Apartment Absorptions
There were 61,500 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the third quarter of 1998, up a statistically insignificant 12 percent from the previous quarter and up 20 percent from the third quarter of 1997. Of the apartments completed in the third quarter of 1998, 71 percent were rented within 3 months. This absorption rate is a statistically insignificant 1 percent above the previous quarter but a statistically insignificant 3 percent below the same quarter in the previous year. The median asking rent for apartments completed in the third quarter was $716, which is a statistically insignificant
1 percent below the previous quarter and a statistically insignificant 2 percent below 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 third quarter of 1998 totaled 332,000 at a seasonally adjusted annual rate, a statistically insignificant 4 percent above the level of the previous quarter and 14 percent above the third quarter of 1997. The number of homes for sale on dealer lots at the end of the third quarter totaled 155,000 units, a statistically insignificant 2 percent above the previous quarter and 17 percent above the same quarter of 1997. The average sales price of the units sold in the third quarter was $44,700, 5 percent above the previous quarter and 7 percent above the thirdquarter 1997 price.
*Units in thousands. These are HUDcode 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 fourthquarter value for the index of current market activity for singlefamily detached houses stood at 85, up 8 points from the third quarter and up 23 points from 1997's fourth quarter. The index for future sales expectations, 82, was up 2 points from the thirdquarter value and up 15 points from 1997's level. Prospective buyer traffic had an index value of 55, which is unchanged from the thirdquarter value but up 12 points from 1997's fourthquarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the fourth quarter, this index stood at 76, which is up 5 points from the thirdquarter level and up 18 points from the value in 1997.
Source: National Association of Home Builders, Builders Economic Council Survey 
