Low interest rates, increased housing affordability, and a strong economy have paved the way to the highest homeownership rate ever -- 66 percent in the third quarter of 1997 -- according to U.S. Housing Market Conditions. All regions of the country reported strong or improving housing markets, anchored by healthy housing production and home sales.
Sales of both new and existing homes remained strong. New home sales for 1997 are close to breaking an 18-year record with more than 800,000 new homes sold during the third quarter -- slightly higher than the previous quarter. Sales of existing homes also continued at record-breaking levels, with more than 4 million sold during the third quarter. If the pace continues, sales of existing homes will hit an all-time high in 1997. However, the manufactured home market took a sharp dip, with placements down 20 percent from last quarter.
The overall economic picture remained bright around the country. Job market conditions were favorable through the third quarter of 1997, with all regions reporting employment growth. While homebuilding was down modestly throughout much of the Nation, a number of metropolitan housing markets are poised for a record year in home sales.
Other indicators suggest that residential construction continues to be on par with the high levels of activity seen in 1996. New housing construction permits are holding steady and construction starts are up slightly from last quarter as both indicators approach 1996's 8-year high.
Despite mixed performance during the third quarter, rental markets have remained generally healthy throughout the country. New England is on track to have its most productive year for apartment construction since 1990. The apartment boom continued in the Southwest, with all States reporting increased building permit activity during the first 3 quarters of 1997.
A special feature in this issue looks at questions surrounding Home Mortgage Disclosure Act (HMDA) data, which are used to test for bias in mortgage lending at the neighborhood level. The article specifically discusses the importance of separating prime lending from that for manufactured homes and subprime lending when analyzing HMDA data because of the unique character of the latter types of loans.
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