INDUSTRY

• The homebuilding industry is valued at approximately $250 billion.
• Housing starts hit a 17-year high in 2003, with total starts reaching 1.85 million, up 8.4% from 1.7 million in 2002. Single-family housing starts alone reached 1.5 million in 2003, the highest level in history (U.S. Census Bureau).
• In 2003, new home sales reached a record 1.085 million units, up nearly 8% percent from 976,000 in 2002. This also marked the first time in history new home sales broke the one-million-mark.
• The combination of consumption and private investment spending on housing represented about 15% of GDP in 2001, and close to that in 2002 and 2003 (Fitch Ratings, 12/03).
• Today, the construction of 1,000 single-family homes generates 2,448 full-time jobs in construction and construction-related industries; $79.4 million in wages; and $42.5 million in combined federal, state and local revenues and fees (NAHB).
• Home ownership is expected to reach 70% in the coming decade, compared to 64.7% in 1995, and 63.9% in 1985 (NAHB).
• 30-year mortgage rates hit a 30-year low of less than 6% in 2003. The 30-year mortgage rate reached more than 18% in 1982 (Freddie Mac).
• The average American family has greater than 125% of the income required to purchase a median-priced home. About 65% of U.S. families were able to afford median-priced homes in 2002 (National Association of Realtors).
• The number of two-home families more than doubled to 4.3 million between 1989 and 1998. Growth in that segment is expected to accelerate in the years ahead (Stern Stewart and Co., January 2003).
• Historically, rising mortgage rates have only had a moderate impact on the new home market. During periods of rising rates dating back to 1977, the average loss of new home sales was approximately 38,000 per 1% rise in mortgage rates. A loss of 38,000 new homes represents approximately 5.6% of total annual new home sales for the years 1997 to 2000 ("period of rising rates" defined as intervals during which the peak-to-trough difference in 30-year rates exceeded 150 basis points) (U.S. Census Bureau, Freddie Mac).

DEMOGRAPHIC

• Census Bureau projections indicate that the number of households will grow by nearly 24 million between 2000 and 2020, from 105 million to 129 million - approximately 1.2 million new householders per year.
• In 2002, non-Hispanic whites had a 74.3% homeownership rate, while African-Americans had a 48% rate and Hispanics a 47.6% rate (U.S. Census Bureau). President Bush has a comprehensive agenda to help increase the number of minority homeowners by at least 5.5 million before the end of the decade.
• Immigration to the United States has grown steadily in the past several decades, growing from 4.5 million new immigrants in the 1970s, to 7.3 million in the 1980s, to 9.1 million in the 1990s. Immigrants tend to have higher home ownership rates than U.S.-born citizens. Immigrants are typically in the rental market during their first several years of U.S. residence. After becoming established, they move into the home ownership market. Many of the 4.5 million immigrants that came to the U.S. between 1990 and 1994 will soon become first-time home buyers (Immigration and Naturalization Service, U.S. Census Bureau).
• Baby Boomers are the fastest-growing segment of the housing market. The number of Americans turning 50 is expected to reach 4.1 million in 2005 and 4.3 million in 2010. The average age of a second home owner is 52 (U.S. Census Bureau).

PUBLIC BUILDERS

• In 1990, large publicly traded homebuilders controlled less than 10% of the homebuilding market. In 2003, that market share grew to between 20 - 25%. Analysts estimate that could become 35 to 40% by 2010 (Wachovia, BB&T, CSFB).
• Today, public homebuilders sell nearly 75% of their homes before completion. This is up from less than 50% in 1974 (U.S. Census Bureau).
• The homebuilding group has returned 16 percent so far in 2004, the third-best return among the S&P 500's 114 sub-sectors. The solid performance comes after the group notched a 97 percent return in 2003. (Lipper -- reported by Financial Times March, 2004)