“This should be a good year for housing, buoyed by sustained job growth, rising customer confidence that is back to pre-recession levels and a gradual uptick in household formation: says NAHB Chief Economist David Crowe. ” We expect 2016 to be even better, due to a significant amount of pent-up demand and an economy that will be entering a period of reasonable strength and consistency”
Over the last seven years due to the uncertainty in the job and housing markets. 7.4 million home sales have been lost in the form of home sales as job and economic. Crowe estimates.
“While some of these sales will never take place, this does indicate how many sales were lost as fewer households decided to move” Crowe says” We expect at least some of these to return in the form of new home sales as job and economic growth continue to firm”
Behind a lot of this forecasted upswing will be millennials and first-time home buyers, Crowe says, First-time buyers have been averaging 30 percent of the normal activity, traditionally, they average 40 percent. But as unemployment declines, Crowe believes millennials will enter into home ownership.
A Return to Normal
NAHB economists, using the 2000-2003 period as a healthy benchmark for single-family homes, predict that single family production will rise to 61 percent of normal activity by the fourth quarter of this year. Economist also predict that single-family starts will rise to 81 percent of normal by the end of 2016.
Whats more, economist say that by the end of 2016, the top 40 percent of states will be back to near normal production levels.
“Housing demand is now being driven by population growth and income and employment growth” says Robert Denk, NAHB senior economist. ” We are reconnecting to underlying fundamentals. We really have turned to corner”
Overall, single family housing starts will likely post a 9 percent increase this year to 704,000 units. 2016 is forecasted for a 39 percent increase to 977,000 units.
Source : National Association of Home Builders.