Chart 1

2/27/03

Investment Shares of GDP

Business
Percent 8 Quarterly 7 8

Non-high-tech equipment High-tech equipment and software Nonresidential structures

7

6

6

5

5

4

4

3

3

2

2

1

1

0

1965

1970

1975

1980

1985

1990

1995

2000

0

Household
Percent 10 Quarterly 9 8 7 6 5 4 3 2 1 0 9 8 7 6 5 4 3 2 10

Housing Consumer durables

1 0

1965

1970

1975

1980

1985

1990

1995

2000

Shaded regions indicate NBER recessions, except 2001:Q2-2001:Q4, where a trough has not yet been announced. Source: Bureau of Economic Analysis. Shares are ratios of nominal quantities.

Chart 2

Real House Prices
Index, 1979Q1 = 100 150 Index, 1979Q1 = 100 150 Repeat-sales price (existing homes) Constant-quality price (new homes) 140 140

130

130

120

120

110

110

100

100

90

90

80

80

70

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

70

Note. Repeat-sales price index is extended back prior to 1975 using the median sales price of existing homes. Prices are deflated using the price index for personal consumption expenditures other than food and energy. Sources. OFHEO, Census Bureau, National Association of Realtors.

Chart 3

2/27/03

Growth in Household Stocks
Four-quarter changes
Percent 9

9

8

Consumer durables Housing

8

7

7

6

6

5

5

4

4

3

3

2

2

1

1

0
1972 1974 1976

1966

1968

1970

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

0

Shaded regions indicate NBER recessions, except 2001:Q2-2001:Q4, where a trough has not yet been announced.

Source: Bureau of Economic Analysis

Chart 4

2/27/03

Actual and Target Household Stocks

Housing
Billions of 1996 dollars 11000 11000

10000

Actual Target with actual user cost Target with average user cost

10000

9000

9000

8000

8000

7000

7000

6000

6000

5000

5000

4000

4000

3000

1965

1970

1975

1980

1985

1990

1995

2000

3000

Consumer Durables
Billions of 1996 dollars 4000 4000

3500

3500

3000

3000

2500

2500

2000 1500

2000 1500

1000

1000

500

500

0

1965

1970

1975

1980

1985

1990

1995

2000

0

Shaded regions indicate NBER recessions, except 2001:Q2-2001:Q4, where a trough has not yet been announced. Source: Bureau of Economic Analysis; Federal Reserve; author’s calculations.

Chart 5

Ratio of House Prices to Per Capita Disposable Personal Income
9.0 Ratio 9.0

8.5

8.5

8.0

8.0

7.5

7.5

7.0

7.0

6.5

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

6.5

Note. The ratio is the OFHEO existing home repeat sales index (1996=100) multiplied by the average sales price of existing homes in 1996 from the National Association of Realtors divided by per capita disposable personal income as reported by the BEA.

Affordability Index of Existing Homes
150 Index 150

140

140

130

130

120

120

110

110

100

100

90

90

80

80

70

70

60

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

60

Note. A value of 100 indicates that the median family income is equal to the qualifying income for the median price of existing homes sold. Qualifying income is the income required to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. Values greater than 100 indicate that the median family income is greater than the qualifying income. Source. National Association of Realtors.