Home sales hit records, driving up rental vacancy rate; other construction markets weaken.
The dichotomy between single-family housing and all other sectors widened in the latest data. Today the Census Bureau reported that the homeownership rate held virtually steady at a near-record 68% of all households in the 3rd quarter. The rental vacancy rate tied the record 9.1% set in the 1st quarter, up from 8.5% in the 2nd quarter and 8.4% in the 3rd quarter of 2001. Both figures are closely tied to the record levels of home sales reported Friday. Census said then that sales of new single-family homes totaled 1,021,000 at a seasonally adjusted annual rate in September, 0.4% higher than the upwardly revised level for August and 19% above the September 2001 figure. The National Assn. of Realtors said existing-home sales rose 1.9% for the month to a 5.40 million pace. That is 7.9% above the September 2001 rate. The number of new homes for sale remained a tight 4 times the number sold in the month. But the inventory of existing homes for sale rose faster, up 4.9% for the month, leaving a 5.2 month supply. The median selling price rose over the year by 6% for new homes, 8% for existing.
Mortgage rates that fell steadily from April until hitting a record low in September enabled many renters to buy homes but also increased vacancy rates for rental housing. Since then, mortgage (and other interest) rates have moved up: the weekly Freddie Mac survey of rates for new 30-year fixed mortgages rose to 6.31% last week from its all-time low in September of 5.98%.