NAHB Webinar: Economists Predict Slow and Steady Housing-Market Uptick
Date：28.04.12
In news that gives doors dealers more reason for cautious optimism, the housing market is expected to move in a slow, gradual upward path in 2012, according to economists participating in last week's National Association of Home Builders (NAHB) construction forecast webinar.
While the latest monthly housing data have shown signs of a slight recovery, NAHB Chief Economist David Crowe said this is more reflective of typical month-to-month volatility in the numbers and unusual seasonal factors than they are of any significant downward trend in the broader housing market.
"The aggregate information suggests we're just in a pause mode right now in terms of these measures," said Crowe, who noted this could partly be the result of better-than-usual weather into the picture at the start of this year and pulled some housing activity forward.
Crowe said the "housing outlook continues to slowly brighten," noting builder sentiment, new-home sales and housing production. He added numerous other fundamentals remain positive, including demographic factors. Pent-up household demand is expected to ramp up. More than 100 local markets are currently listed on the NAHB/First American Improving Markets Index (IMI).
However, he cautioned that housing still continues to face formidable challenges of its own, such as rising foreclosures, persistently tight lending standards for home buyers and builders, and difficulties in obtaining accurate appraisals. Moreover, disappointing job growth numbers in March and uncertainty in the European economy are undermining prospects for a vigorous recovery.
"No one is anticipating that an upward path for housing will run in a straight-line trajectory," said Crowe. "The economy is in an uneven recovery and we can expect some corresponding ups-and-downs in the housing market in the months ahead. However, NAHB believes that on the whole, we can expect a slow and gradual recovery in housing starts, home sales and the overall housing market in 2012."
Starts and Sales on Upward Path
New-home sales are expected to climb from a record-low of 305,000 units in 2011 to 357,000 this year and 505,000 in 2013. Existing single-family sales are expected to follow suit and rise from 3.8 million last year to 4.4 million in 2012 and 5.4 million next year.
Housing starts are also anticipated to move in the same upward trajectory, Crowe said, with single-family housing production increasing from 434,000 units last year to 503,000 this year and a more solid 660,000 in 2013.
On the multifamily side, starts posted a healthy 55 percent increase in 2011 over 2010.
"A lot of newly formed households have become renters, so we need more rental units," Crowe said. "We don't expect to see the same rate of increase moving forward, but we should continue to see a healthy recovery."
NAHB is anticipating that multifamily starts will rise from 177,000 units last year to 216,000 in 2012 and 235,000 in 2013.
With many households choosing to stay in place and remodel their homes rather than move, residential remodeling is expected to rise 12 percent this year and another 7.9 percent in 2013.
Conditions Vary by State
Robert Denk, NAHB's assistant vice president for forecasting and analysis, noted a range of conditions across the country and differences among the states in the amount of distress suffered during the recession and the headway that is being made in recovering.
Housing nationwide bottomed out at an average 27 percent of normal production, which he defines as the residential building that occurred in 2000 to 2003. The hardest hit states, such as California, Florida, Nevada and Arizona, bottomed out at between 10 percent and 15 percent of normal production, while better states, in sharp contrast, declined to 50 percent of normal production.
Denk said that housing prices are drifting back to near-normal in many states. The number of states where house prices now exceed their historic trend are continuing to recede, joining the states where prices are in the normal range.
Some states however, such as Arizona and Nevada, have seen an overcorrection of boom prices and will take longer to get back to normal.
"What we are seeing is stabilization of house prices across the country, back to nearly their historical averages," Denk said.
Getting back to normal considerably faster will be oil states Texas and Oklahoma; coal and natural-gas producing Wyoming and Montana; and Iowa, supported by agricultural commodities.
The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in remodeling, home building, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction, including garage door dealers.
