Homeownership Hit Record 68.3 Percent in Last Quarter
posted January 28, 2003
WASHINGTON - Proving that housing was a crucial stabilizing force for the national economy last year and that the industry has plenty of momentum heading into 2003, Commerce Department figures released this week show that more newly built homes were sold in 2002 than in any other year in history, with December posting the strongest sales pace for any month on record.
"We now know that 2002 was the year of hearth and home in America," said Jerry Howard, executive vice president and CEO of the National Association of Home Builders (NAHB). "The lowest mortgage rates in years and solid
homeownership reached its highest level yet - 68.3 percent - in 2002's final quarter."
Total new home sales for 2002 reached 976,000, up 7.5 percent from the previous annual record of 908,000 units set in 2001. For the month of December alone, new-home sales hit a seasonally adjusted annual rate of 1.08 million units, up 3.5 percent from November. This is the fastest sales rate for any month on record and marks the fifth consecutive month of sales above the million-unit rate.
The inventory of unsold new homes was at a low 3.8 months' supply at the end of 2002, about the same level as last year and down slightly from a 3.9 months' supply in November.
"A sales pace above the million-unit mark was unheard of prior to August of 2002. Now we've had five months in a row above that, capping the period with the strongest sales pace ever. That's some powerful momentum heading into
2003, particularly in light of the tight inventory situation, builders' positive views of the marketplace and expected low mortgage rates through most of this year," said Howard.
Regionally, only the Northeast saw fewer new-home sales in 2002 than in 2001, inching down 3 percent to 64,000. The Midwest posted a 15.2 percent gain in sales from the year before, while the South and West posted 2.3 percent and 14.6 percent gains, respectively. But for December alone, both the Northeast and West posted significant declines of 13 percent and 7.5 percent from the previous month. The Midwest gained more than 28 percent, while the pace of sales in the South did not change between November and December.
"Given that the Northeast and West posted relatively strong price gains for the year as a whole and in 2002's final quarter, the erosion of sales numbers in those markets is probably less a reflection of weakening demand than it is of a constrained supply of new homes brought on by stringent land-use controls," said NAHB Chief Economist David Seiders.
"NAHB is currently forecasting that new-home sales in 2003 will edge down to a solid 942,000 units, still the second strongest number on record," said Seiders. This projection does not factor in the potential effects of an
economic stimulus package.
The National Association of Home Builders is a Washington-based trade association representing more than 214,000 members involved in home building, remodeling, multifamily construction, property anagement,
subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction
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