Magazine article Mortgage Banking

Industry Housing Forecasts

Magazine article Mortgage Banking

Industry Housing Forecasts

Article excerpt

* Both the National Association of Home Builders (NAHB), Washington, D.C., and the National Association of Realtors[R] (NAR), Chicago, are expecting a sustained housing recovery well into 2015. Barring any unforeseen circumstances, economists at the two organizations predict that existing home sales and housing starts will feed upon themselves in each of the next two or three years.

At its semi-annual webinar on the construction outlook in mid-October, the NAHB said builders should wind up beginning construction on 528,000 single-family houses and 224,000 multifamily units in 2012. Those figures represent gains of 21 percent (from 434,000 houses in 2011) and 26 percent (from 224,000 apartments), respectively.

"We'll see a more robust housing sector," said NAHB Chief Economist David Crowe, who expects production to continue rising in each of the subsequent two years.

Even though credit remains tight for both builders and their potential buyers, Crowe believes single-family starts will rise 26 percent in 2013 to 665,000 and 30 percent in 2014 to 865,000. Multifamily starts, on the other hand, are projected to rise just 6 percent in 2013 to 238,000 units and 16 percent to 275,000 units in 2014.

Crowe said the new-home market is gaining traction as a result of stronger consumer confidence, pent-up housing formations and rising prices. Between April 2011 and July 2012, the average new-home price rose 7.1 percent, he reported, from $181,400 to $190,100.

NAR offered an even brighter outlook for the existing-home sector, with sales anticipated to push beyond the 5 million level this year and prices to rise substantially over the next three years.

"Our members are smiling this year," said Lawrence Yun, NAR's chief economist, at the group's annual convention in November in Orlando, Florida. "After four straight very, very rough years, demand is clearly recovering. …

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