NAHB: Expect slow, steady growth in housing market in 2013
Lending contraints slow recovery
The housing market should experience growth in 2013 that is slow but steady, the National Association of Home Builders (NAHB) said in a recent report.
According to the NAHB’s economic and housing forecast (by chief economist David Crowe), recent housing indicators suggest that growth will occur in 2013 but will be slowed by some familiar challenges.
“Consistent, positive reports on housing starts, permits, prices, new-home sales and builder confidence in recent months provide further confirmation that a gradual but steady housing recovery is underway across much of the nation,” Crowe said in a statement.
But restraints from the mortgage process may slow the upward trend some, Crowe said. Despite low mortgage rates, buyers may still be held back by lending issues.
“However, stubbornly tight lending standards for home buyers and builders, inaccurate appraisals and proposals by policymakers to tamper with the mortgage interest deduction could dampen future housing demand,” he said.
Back about a decade ago, the NAHB said, about 1.4 million new homes were being built each year. This number dove to about 500,000 per year during the housing market issues of the recent past but has now risen to about 900,000 per year.
“We’re not up to normal, but this is adding to demand for housing,” Crowe said.
Single-family home building is on the rise
In 2012, new builds on single-family homes rose to about 534,000 units (projection), which is a 23 percent increase from 2011.
The NAHB forecasts that this number will rise another 21 percent in 2013 to 647,000 and then another 29 percent in 2014 to bring the total to 837,000 units.
Sales of new single-family homes rose to about 367,000 (projection) in 2012, a 20 percent increase from 307,000 in 2011.
New single-family home sales are forecasted to rise 22 percent in 2013 to 447,000 next year, and then another 36 percent in 2014 to 607,000.