The ongoing housing recovery shows all indications that it will continue for the immediate future. According to economists that recently participated in a Construction Performance Forecast Webinar, the housing recovery is expected to gain momentum next year and particularly in 2015. The webinar was hosted by the National Association of Home Builders (NAHB) and they are forecasting 924,000 total housing starts in 2013, which is a 18% increase from the 783,000 units last year! Single-family production is expected to rise 17% this year to 629,000 units, increase an additional 31% next year to 826,000 and surpass the one million mark in 2015!!
Some of the reasons for the optimistic forecast are the current inventory shortage and rising household formations. "From the standpoint of GDP growth, housing has been a plus, growing at two, three and four times the rate of the rest of the economy in recent quarters," said NAHB Chief Economist David Crowe. "Helping to spur the housing rebound was a double-digit increase in home prices over the past year, driven in part by tight inventories of new and existing homes for sale and gradual gains in employment," stated Crowe. Another bright spot is rising household formations that were delayed during the economic downturn as college graduates and young professionals were forced to move back in with their parents or double up as roommates. During the earlier housing boom, the U.S. was producing 1.4 million additional households every year and dropped to a low of 500,000 during the recession!!! Today the number is growing and is back to 700,000.
Another factor is that many households have been increasing their savings and eliminating consumer debt. "They've corrected a lot of excesses and feel more comfortable about moving forward," Crowe said. He notes that the University of Michigan Consumer Sentiment Index shows that the percentage of consumers who believe that now is a good time to buy a house is back up to levels last seen near the housing boom.
The good news and outlook is great for everyone whether you are a current or prospective homeowner as well as real estate professional!!!! Source: NAHB
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