Home price appreciation helps housing move forward on road to recovery

Home News Home price appreciation helps housing move forward on road to recovery

Washington – Sparked by rising home prices across much of the nation, the housing recovery is now under way. However, fiscal uncertainties and other challenges could result in a bumpy ride in the coming months, according to economists who participated in the National Association of Home Builders (NAHB) webinar on the construction and economic outlook, held on October 17.

“We’re seeing a more robust housing sector than many other parts of the economy,” said NAHB chief economist David Crowe. “One of the reasons is we have finally begun to see on a national scale that house prices are picking up again.”

Crowe cited a number of other factors that are carrying the housing momentum forward, including:

·    Pent-up household formations
·    Rising consumer confidence
·    Increasing builder confidence in all three legs of the industry: remodeling, multifamily and single-family construction
·    Growing rental demand
·    More than 100 metros currently on the NAHB/First American Improving Markets Index

However, Crowe offered several cautionary factors that continue to put a drag on housing activity at this time – including builders who are experiencing difficulties in obtaining production credit, qualified buyers who are unable to obtain mortgage loans, inaccurate appraisals, delinquent mortgages that are at least 90 days late or in foreclosure, and a limited inventory of developed lots in certain markets.

Other causes contributing to uncertainty in the marketplace include the looming “fiscal cliff” that will trigger mandatory budget cuts and tax increases at the beginning of next year, pending Dodd-Frank Act regulations that are making financial institutions hesitant to lend since they don’t know how the new rules will affect them, tax reform, and the future role of Fannie Mae and Freddie Mac in the nation’s housing finance system.

NAHB is forecasting a 21 percent increase in single-family starts this year to 528,000 units and a further 26 percent climb to 665,000 units in 2013. Multifamily housing starts are expected to rise 26 percent this year to 224,000 units and 6 percent in 2013 to 238,000 units.

According to Robert Denk, NAHB’s assistant vice president for forecasting and analysis, housing starts on a natitonal basis are projected to get back to 55 percent of normal production by the end of next year and 70 percent of normal by the end of 2014.

 

Must Read

Specifying in the age of COVID-19

By John McGrath The International Standards and Training Alliance (INSTALL) is putting a greater emphasis on working hand-in-hand with commercial architects and designers to develop...

What can be learned from an old classified ad

By Steven Feldman “Men wanted for hazardous journey, small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful, honor and recognition...

Shaw Floors taps Jon England

Dalton—Shaw Floors has named industry veteran Jon England its new director of resilient category management. England most recently served as chief sales and marketing officer...

NFA takes the lead in bringing back in-person events

By Ken Ryan When the National Floorcovering Alliance (NFA) convenes in Savannah, Ga., next week, it will mark the first time in more than six...

Republic joins NFA vendor ranks

By Ken Ryan Republic Flooring has graduated from specialty vendor to core vendor of the National Floorcovering Alliance (NFA). The move represents another feather in...

Mannington Commercial partners with Material Bank

Calhoun, Ga.—Mannington Commercial has entered into a new partnership with Material Bank, the largest material marketplace in the architecture and design industry. Effective today,...
X