Dive Brief:
- Economists with the National Association of Home Builders, during the NAHB’s annual forecast webinar, predicted a significant increase in the number of single-family homes built in the next two years — with new construction reaching one million in 2016 and 1.2 million in 2017, Builder Magazine reported.
- Robert Denk, an NAHB senior economist, cited a pent-up demand for housing production as the main driver of the coming increases, due to relatively low production since the recession.
- NAHB Chief Economist David Crowe chalks up the housing recovery to an increase in employment, even though the growth in service jobs is outpacing higher-paying, goods-producing jobs.
Dive Insight:
The predictions from NAHB economists signal growing confidence in the housing market's slow, but steady, recovery.
Denk said the number of single-family home starts continues to rise from a post-bubble low of 350,000 in 2009. The post-mortems on the recession are over, and the current issues in housing involve population growth and employment. "We’re really in a very different place than we were in the early rounds of the recovery," Denk said.
Crowe also predicted a spike in mortgage rates — 4.5% in 2016 and 5.5% by 2017 — but said higher rates are a result of a healthier economy.
During the webinar, Trulia economist Ralph McLaughlin also shared survey results that found American homebuyers see themselves, in the future, living in modern, modest-sized homes in the suburbs. He said the trend to move into urban areas "was more a blip" than a long-term trend.
McLaughlin added that the number of 25-34 year olds who are homeowners has fallen because of a decrease in marriage in that demographic. "Marriage is a strong correlation to homeownership," he said.
