Housing will see gradual improvements in activity this year as the nation’s economy and job market continue to move to higher ground, establishing momentum that will produce more considerable gains in 2012, according to the National Association of Home Builders (NAHB). David Crowe, NAHB chief economist, was one of the speakers during an event held last week during the International Builders’ Show (IBS).

“This year’s spring selling season will be better than last year’s,” said Crowe, with job growth providing a stronger stimulus in the housing market than last year’s tax credits for homebuyers.

Crowe forecasted 575,000 single-family home starts in 2011, a 21-percent climb over an estimated 475,000 units started in 2010, which in turn showed a 7-percent gain from the 442,000 homes started in 2009.

Multi-family, which is poised to profit from a disproportionate number of Gen Y members moving into the housing market, has seen the bottom of the cycle, he said, and will see its starts rise 16 percent this year to 133,000 units, with a further 53-percent increase in 2012 to 203,000 units.

Builders’ access to the credit they need to start new homes remains the fragile component of the NAHB forecast, Crowe said. So far, small builders have experienced extreme difficulty in obtaining financing, and rectifying the situation as soon as possible is the top priority of the association.

The recession delayed as many as two million household formations over the past few years, Crowe added, as individuals doubled up with family and friends to weather a dismal job market. These households will begin to form as jobs improve, and they “are the next to move into a new home or apartment.” The economy should be adding a “solid” 200,000 jobs monthly in 2012, he said.

The U.S. economy will receive a boost from the massive tax package enacted at the end of last year, Crowe said, including more income going into the pockets of wage earners thanks to a one-year 2-percent reduction in Social Security taxes. This will contribute to the gross domestic product strengthening from the 2.5-percent range to 3.5 to 3.8 percent by year’s end.

New-home sales, Crowe projected, “will struggle” but begin following employment gains, reaching 405,000 for the year, up from an estimate of about 320,000 for 2010.


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