Housing Forecast: The Good News Continues

October 4th, 2013 by DWM Magazine

croweoct22013_Page_4When the National Association of Homebuilders (NAHB) held its annual Fall Construction Forecast Webinar this week, the economists had numerous good news indicators to share—a welcome change from recent years.

David Crowe, NAHB chief economist, reported that “multifamily has been the star of the show. We are seeing this move up nicely but its growth speed will begin to slow down.”

He also said that the single family index finally made it over 50.

“Single family builders are finally feeling the market coming back,” he said. “This will be a significant provider of housing demand and is gaining speed.”

So how much will housing starts rise this year? Crowe predicted a 17 percent improvement over last year.

“We did have a soft spot in the middle of the year that seems to be over,” he said. “We should pass that million mark by 2015.”

Mark Zandi, chief economist, Moody’s, pointed out that in the current housing market supply is around 950,000 units.

“In a normal economy we should be at 1.7 million,” he said. “We have made a lot of progress in working off excess inventory. Going forward we are going to suffer from an under supply. Go to Texas and you will feel it. In the next three years this will be a problem in other markets. The problem is going to be too little housing.”

croweoct22013_Page_7Robert Denk, assisting vice president forecasting and analysis, NAHB, also pointed out good news factors including the normalization of house prices and a reduction in foreclosures.

Addressing the remodeling market, Crowe said this will be a soft recovery as this market didn’t fall as bad so there is not as much ground to make up.

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