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Economists See Home Building Surge Coming: Realty News Report @ IBS in Las Vegas

Chief economists: David Crowe of NAHB, David Berson of Nationwide and Frank Nothaft of CoreLogic issued forecasts at the builders convention in Las Vegas. (Photo by Ralph Bivins, Realty News Report)

Chief economists: David Crowe of NAHB, David Berson of Nationwide and Frank Nothaft of CoreLogic issued forecasts at the builders convention in Las Vegas. (Photo by Ralph Bivins, Realty News Report)

LAS VEGAS – Home starts will rise about 18 percent in 2016, followed by a 30 percent increase in 2017, according to a forecast by David Crowe, chief economist of the National Association of Home Builders.

An improving economy, generally steady job growth and increasing consumer confidence are helping to bring buyers back into the marketplace, said economists speaking at the recent NAHB International Builders’ Show.

“A number of positive indicators provide solid evidence that this will be a good year for housing and the economy,” said NAHB’s Crowe.

“Private sector job growth has been averaging 240,000 per month for the past two years,” he said. “GDP growth is expected to climb slightly above last year’s level and consumer confidence is nearly back to pre-recession levels.”

NAHB forecasts 1.26 million total housing starts (single and multifamily) in 2016, up 13.4 percent from 2015. Single-family home production should reach 840,000 units this year, a hike of 18 percent from the estimated 711,000 units in 2015.

Home starts are also getting a boost from low mortgage rates and affordable home prices. Frank Nothaft, chief economist of CoreLogic, said 30-year fixed-rate mortgages were at or below 4 percent in 2015, a level he called “cheap.” Nothaft, former chief economist for Freddie Mac, predicted that 30-year mortgages will go no higher than 4.5 percent by year-end.

The IBS convention expo in Las Vegas, January 2016. (Photo credit: Ralph Bivins, Realty News Report)

The IBS convention expo in Las Vegas, January 2016. (Photo credit: Ralph Bivins, Realty News Report)

Nationwide, he said, home prices “may increase this year 4 to 5 percent above last year’s level, reaching the 2006 price peak by mid-2017.” Nothaft is forecasting a 13 percent increase in new home sales in 2016.

David Berson, chief economist at Nationwide Mutual Insurance, said the Millennial Generation is moving into the home buying market.

“I think we’ll see a pick up in the first time homebuyer this year,” Berson said.

Berson said he also expects some softness in Houston and North Dakota because of the energy downturn.

Jan. 30, 2016

Realty News Report is a Texas-based publication edited by Ralph Bivins.

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