For those of you that like to keep up with the latest news on the state of the Housing Market I thought I would pass along this recent article from the NAHB (National Association of Home Builders) on the their economic outlook for this year.
Parkinson Building Group
While 2012 is starting with the same kind of optimism regarding housing and the economy that prevailed at the start of 2011, there are several reasons to believe that real improvement will actually materialize this year rather than fizzling out as it did in the past, said NAHB Chief Economist David Crowe during our Feb. 11 webinar. In fact, he noted, we are already seeing improving GDP growth, stronger employment figures and slight gains in consumer confidence that bode well for a slow but relatively steady recovery in the months ahead. Dave noted that NAHB's builder confidence gauge known as the HMI has gained seven points over the past three months, while over the same period, both housing starts and sales have charted consecutive gains and NAHB's list of improving housing markets has continued to grow. Meanwhile, household formations are finally starting to pick up after a big lull during the recession, today's very favorable mortgage rates aren't expected to creep up fast or far over the coming year, and price-to-income ratios are back to what they were prior to the boom years. Of course, all markets are local, and certain metros are already showing greater signs of growth than the national average, as demonstrated by the NAHB/First American Improving Markets Index that has been expanding over the past several months to include a geographically and economically diverse set of metros (story below). As for the economy, our Chief Economist is forecasting GDP growth in the neighborhood of 2.2% to 2.4% in 2012, followed by more robust growth in the longer-term. NAHB's forecast also anticipates single-family housing starts will gain approximately 17% in 2012 following what was almost certainly the worst year on record in 2011. By far the brightest part of the forecast is for rental apartments, which will enjoy greater demand over the coming year as more young people take their first steps up the housing ladder. This demand accounts for a more-than 50% gain in multifamily housing starts in 2011 from 2010. But remodeling is also in relatively good shape, with the dollar amount of remodeling projects on owner-occupied homes now actually beating the dollar amount of new-home construction taking place. The bottom line for 2012 is that, while demand for new homes won't "burst forward," it will slowly improve now that the overall housing market appears to have reached a bottom and started back on the path to recovery.
A full replay of the forecast webinar is available here; please note that the event begins with an overview of the results of NAHB's recent poll on homeownership, and that the file may take a few moments to download. If you encounter technical issues in viewing this webinar, please contact Paula Pagano (800-368-5242 x8057)