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HUD Archives: News Releases

HUD No. 98-621
Further Information:For Release
In the Washington, DC area: 202/708-0685Friday
Or contact your local HUD officeNovember 20, 1998


WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo issued a report today showing that the American housing sector continues to set a vigorous record-setting pace for 1998.

"Today more American families are attaining the American dream of owning their own home than at any time in our history," Cuomo said. "The economy, in responding to the President's initiatives and policies, is providing low interest rates and making homeownership affordable."

The report - U.S. Housing Market Conditions for the third quarter of 1998 - reports that housing market activity in the third quarter of 1998 continued the record-setting pace of the first two quarters. Despite some signs of slowing at the end of the third quarter, 1998 will be one of the best years for housing. U.S. Housing Market Conditions brings together data from the housing, real estate, and primary and secondary mortgage markets. HUD field economists describe regional and local housing markets. Data are collected from housing organizations such as the National Association of HomebuildersŪ, the National Association of RealtorsŪ, Fannie Mae, and Freddie Mac. Other data come from HUD, the U.S. Census Bureau, and the Commerce Department.

The HUD report on conditions in July, August and September 1998 found:

  • Permits were issued in the third quarter at a seasonally adjusted annual rate (SAAR) of 1,581,000 units, 4 percent ahead of the second quarter's rate and 9 percent ahead of the rate of the third quarter of 1997.

  • Construction was started on 1,632,000 (SAAR) housing units in the third quarter of 1998. This is 4 percent ahead of the second quarter and 13 percent ahead of the third quarter of 1997.

  • Sales of existing homes set a new monthly record in July and, although rates decreased during the next 2 months, they reached 4,773,000 units (SAAR) during the third quarter of 1998, the same as in the second quarter and 12 percent ahead of the third quarter last year.

  • New home sales in the third quarter were at 842,000 homes (SAAR), 7 percent below the second quarter but 5 percent ahead of 1997's third quarter.

  • Favorable affordability conditions have led to a new homeownership rate record. During the third quarter, 66.8 percent of American households owned their own homes, up 0.8 percentage point from both the second quarter of 1998 and the third quarter of 1997.

  • In the third quarter, 71 percent of the 54,900 new, unsubsidized, unfurnished apartments completed in the second quarter were leased. This was a drop in the absorption rate of 76 percent in the second quarter.

  • The third-quarter rental vacancy rate was 8.2 percent, an increase of 0.2 percentage point from the second quarter. and an increase of 0.3 percentage point from the third quarter of 1997.

  • In the high-volume production areas of Washington, DC, and Atlanta, home building was up 23 and 18 percent, respectively.

  • Florida home builders are having the best year of the 1990s.

  • The strong Texas market continues to gain strength, with home permits up more than 20 percent in the major markets of Austin, Dallas-Fort Worth, and Houston.

  • Industry sources are projecting single-family activity in California to hit 95,000 units by the year's end, well above the 1997 total.

  • Existing home sales in Virginia increased 35 percent and sales in the Washington, D.C., area rose by 27 percent during the first three quarters of this year.

  • The Midwest sales pace reached close to 1 million existing homes annually, the highest volume of the 1980s and 1990s.

  • Rental housing markets and apartment production have held strong through the third quarter. The New England, New York/New Jersey, and Mid-Atlantic regions report balanced to tight conditions. Southeast and Midwest apartment markets are holding their own, with good absorption and vacancy rates at or below 7 percent. Apartment construction levels are up again in the Southwest and Rocky Mountain regions. California rental markets continue to improve, providing the stimulus for a 21-percent increase in multifamily housing permits during the first three quarters of the year. In the Northwest region, the tight rental market conditions of the Seattle area have begun to spread into other Puget Sound markets.

Content Archived: January 20, 2009

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