Shipments of manufactured housing units are likely to be the highest on record once the December figure is determined. While many worry that the activities of 1998 cannot be repeated, the strong finish in the fourth quarter is setting a vigorous pace for the beginning of 1999. Housing production finished the year on high notes across the board. The final quarter of 1998 saw gains in permits and starts, and third-quarter shipments of manufactured homes were also up. Housing sales and marketing also broke records throughout the fourth quarter, with nearly 6 million new and existing homes sold on a seasonally adjusted annual basis in December.
Inventories are at all-time low levels.
The new homes inventory at the end of the fourth quarter represents 3.7 months of sales. A new monthly low of 3.6 months' supply of new homes was set in November. The inventory of existing homes was at an all-time low in December and represents 3.8 months of sales. Prices are fairly stable. Even when adjusted for quality change, the price of new homes increased only 1 percent from the third quarter and 4 percent from last year.