Increasing employment, attractive mortgage rates, a growing economy and pent-up demand will attribute to the housing recovery that will continue throughout 2015, according to economists who participated in National Association of Home Builders 2015 Spring Construction Forecast Webinar.
David Crowe, NAHB Chief Economist, expects 2015 should be a good year for housing and 2016 could be even better, due to job growth, a gradual increase in household formations and plenty of pent-up demand. Crowe estimates 7.4 million lost of home sales occurred due to the slow recovery and uncertainty in the job and housing, during the past seven years. “We expect at least some of these to return in the form of new home sales as job and economic growth continue to firm.” Crowe said in a statement.
Millennials should be the key for housing recovery. The share of first-time homebuyers significantly dropped during the housing downturn. (According to the National Association of Realtors, 33 percent of buyers in 2014 were first-time buyers, well below the historical average of 40 percent). First-time buyers are expected to boost the housing market, as the unemployment differential between young people and others is shrinking.
Single-family housing production is expected to post a 9-percent gain in 2015 to 704,000 units and jump an additional 39 percent to 977,000 units in 2016. The NAHB Remodeling Market Index, which averages ratings of current remodeling activity with indicators of future activity, stands at 57 in the first quarter of 2015, which means more remodelers report market activity is higher than report it is lower. NAHB is forecasting that residential remodeling activity will be increasing gradually until 2016, at about 2.3 percent each year.
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