2009 Real Estate Property Market Housing Results
Single-family housing production indicators (permits, starts, and completions) declined during 2009 and ranged between 24 and 36 percent below their 2008 levels. New home sales also fell during the past year.
A bright spot in 2009 was an increase in existing home sales, spurred by lower home prices and record-low mortgage interest rates and by a new first-time home- buyer tax credit. Housing affordability also improved during 2009 and the FHA’s share of the mortgage market increased. Homeownership rates for the nation and for most groups declined during the past year. The multifamily (five or more units) housing sector weakened in 2009. The housing sector component of GDP (residential fixed investment) declined in 2009, but by a slower rate than in 2008.
■ Builders took out permits for 435,100 new single- family homes in 2009, which is a decrease of 24 percent from 2008. Multifamily permits were issued for 117,200 new units in 2009, down 60 percent from 2008.
■ Single-family housing starts totaled 443,500 units in 2009, down 29 percent from 2008, and multi- family housing starts fell to 98,800 units, 63 percent fewer than in 2008.
■ In 2009, construction was completed on 521,000 new single-family housing units, 36 percent fewer than in 2008. A total of 260,600 new multifamily units were ready for occupancy in 2009, 6 percent fewer than in 2008.
■ Builders sold 374,000 new single-family homes in 2009, down 30 percent from the 485,000 homes they sold in 2008. For all of 2009, the median price of a new home sold was $215,900, down 7.0 percent from 2008.
■ NAR reported that 5.156 million existing single- family homes were sold in 2009, indicating a 5-percent increase from the 4.913 million sold in 2008. For all of 2009, the median price of an existing home sold was $173,500, down 12 percent from 2008.
■ Builders were slightly less optimistic in 2009 than they were in 2008. NAHB/Wells Fargo composite Housing Market Index averaged 15 points in 2009, down 1 point from 2008. The 2009 value, however, is the lowest annual value in the 25-year history of this attitude survey.
■ The average interest rate for 30-year, fixed-rate mortgages in 2009, as reported by Freddie Mac’s Primary Mortgage Market Survey, was 5.04 percent, which is 99 basis points below the 2008 annual aver- age and which sets a record-low annual average rate.
■ According to the NAR Housing Affordability Index, housing affordability improved dramatically in 2009, increasing by 24 percent from 2008. A family earning the median level of income ($60,608) had 167.0 percent of the income needed to purchase the median-priced existing home ($173,200) in 2009. Falling interest rates and lower prices of homes for sale more than offset a 2-percent decline in median income in 2009.
■ The FHA share of the mortgage market, measured by dollar volume of loans, averaged 17.3 percent for the first three quarters of 2009, up from 16.1 percent for all of 2008, while the FHA share by loan count was 20.4 percent for the first three quarters of 2009 compared with 19.9 percent for all of 2008. (The data are reported with a lag.)
■ The FHA guaranteed 2.023 million mortgages in 2009, up 38 percent from 1.468 million in 2008. In contrast, private mortgage insurance on mortgage loans decreased by 54 percent in 2009, from 971,595 loans in 2008 to 442,224 in 2009.
■ Based on the MBA’s National Delinquency Survey, the delinquency rate on all loans through the third quarter of 2009 averaged 9.33 percent, up 35 percent from 6.91 percent for all of 2008. Newly initiated foreclosures averaged 1.38 percent of all loans through the third quarter of 2009, up 30 percent from 1.06 percent for all of 2008. (The data are reported with a 2-month lag.)
■ Based on the Housing Vacancy Survey of the Current Population Survey, the proportion of American households that owned their own homes in 2009 was 67.4 percent, 40 basis points below the 2008 homeownership rate of 67.8. The homeowner- ship rate for White non-Hispanic households was 74.8 percent in 2009, down from 75.0 percent in 2008; the homeownership rate for African-American households was 46.6 percent in 2009, down from 47.9 percent in 2008; and the homeownership rate for Hispanic households was 48.4 percent, down from 49.1 percent in 2008.
■ The number of multifamily housing permits, starts, and completions fell in 2009. The rental vacancy rate increased sharply during 2009, while the absorption of new apartments rose only slightly. The vacancy rate for multifamily rental units increased to 12.3 percent in 2009, up from 10.0 percent in 2008. The average lease rate for newly completed apartments rented within 3 months of their completion was 51 percent for the first three quarters of 2009 compared with 50 percent for all of 2008.
■ The housing component of GDP declined 20.4 percent in 2009 compared with a decline of 22.9 percent in 2008; it contributed a decrease of 0.65 percentage point in real GDP growth in 2009 compared with a drop of 1.0 percentage point in 2008.
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