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Fourth Quarter 2011 Housing Market Conditions

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March 20, 2012  

Fourth Quarter 2011 Housing Market Conditions

HUD’s Office of Policy Development and Research has released the U.S. Housing Market Conditions report for the fourth quarter of 2011, which updates production, marketing, and multifamily sector performance, housing affordability, homeownership, and foreclosures for the year, as well as for the fourth quarter of 2011. The annual analysis indicates that during 2011, building permits and starts declined in single-family housing, while both indicators increased significantly in the multifamily sector, and annual housing completions in both sectors were down. Shipments of manufactured homes increased 3.2 percent. In the marketing sector, indicators were mixed with a decline in new home sales and a rise in existing home sales. The median price of new homes sold rose during the year, but fell for existing homes sold. Housing affordability improved during the year, although homeownership rates for the nation and for major racial/ethnic groups declined. The housing sector component of GDP declined, but by a much slower rate than in 2010.

The report also includes comparisons with the previous quarter and the fourth quarter of 2010, profiles of economic and housing market activity in each of HUD’s 10 regions, and updates of historical trends in national and regional housing markets. This report’s feature article discusses the methodology used to incorporate American Community Survey data into the Fair Market Rents calculation process.

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  • Builders took out permits for 413,600 new single-family homes and 176,400 multifamily units, down 7% and up 35% from the previous year, respectively.
  • Single-family housing starts (428,600) fell 9%, while multifamily housing starts (167,400) increased 61%.
  • Construction was completed on 444,900 new single-family homes and 130,500 new multifamily units, down 10% and 11% from 2010, respectively.
  • The number of new single-family homes sold fell 6.5%, while the median price of new homes rose 1.8% from 2010, to $225,800.
  • Builders’ views on the housing market were unchanged from 2010. The NAHB/Wells Fargo composite Housing Market Index averaged 16 points in both 2010 and 2011.
  • The average interest rate for 30-year, fixed rate mortgages, as reported by Freddie Mac’s Primary Mortgage Market Survey, set a record low. It was 4.45% — 24 basis points below the 2010 annual average interest rate.

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