If you were lucky enough to head to this year’s International Builder Show in Las Vegas then you had more to be excited about than the nice weather. This past week Las Vegas housed the largest home builder’s show and there is some pretty good news coming out from the NAHB.
According to economists speaking at the show, a strengthening labor market, low interest rates, improving mortgage availability and growing pent-up demand will help to significantly boost single-family housing production in the year ahead. Further more it will move the housing recovery to higher ground. Now that is good news for the building industry and for sub contractors like ourselves.
NAHB Chief Economist David Crowe said these are the primary factors that have helped consumer confidence jump back to pre-recession levels. And consumer confidence means more higher end purchases.
“The signs point to a more robust year for housing,” Crowe said. “Household balance sheets are returning to normal levels, home owners’ equity is increasing and significant pent-up demand is rising. More than 7 million existing home sales were postponed or lost during the downturn; and while some are lost forever, we should see some catch-up.”
NAHB is projecting 993,000 total housing starts in 2014, up 6.7% from last year’s total of 930,000 units.
Single-family production is expected to rise 26% in 2015 to 804,000 units. “While a good beginning, this is still well below a normal level of 1.3 to 1.4 million single-family starts,” Crowe said.
On the multifamily front, NAHB is anticipating 358,000 starts in 2015, up 2% from 352,000 last year.
The sale of new single-family homes is expected to hit 564,000 this year, a 29.3% increase above last year’s 436,000 in sales.
Meanwhile, residential remodeling activity is expected to register a 3% gain this year over 2014.
The ongoing housing recovery will see single-family starts steadily climb from 49% of normal production at the end of the third quarter of 2014 all the way up to 90% of normal by the end of 2016, Crowe said. Examining the recovery on a state level, by the end of 2016, the top 40% of states will be back to near normal production levels, compared to the bottom 20%, which will still be below 75%.
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