CNNMoney surveyed a large group of economists and over half agreed that the housing market is fueling the economy this year and promoting further growth. Keith Hembre, Chief economist at Nuveen Asset Management, a company offering institutional investment expertise said, “Homebuilding activity will likely remain the strongest growing component of the economy in 2013.” Home sales showed the largest gain in 5 years last year while home construction starts jumped to the highest levels since the recession. More here
“The construction job recovery has clearly arrived,” said Jed Kolko, chief economist at Trulia, a real estate data analysis firm. Economists had known for several months of 2012 that the market was turning around, due to home-builders breaking ground on 780,000 new homes. An estimated 98,000 construction jobs have been created since September, including 28,000 last month. Single family homes can take up to six months to build while apartment complexes can take up to, or in excess of one year, which in turn requires more help and more jobs being created. Housing led the charge in past recoveries and is trending to do the same for our most recent recession. More here
Last month’s pending home sales fell 4.3% to 101.7, and holds the potential to repeat the same results again this month. Still, economists expect the housing market to gain momentum once more, sustaining growth and stimulating the economy’s progress throughout the year. Pending home sales overall for the last year grew 6.9 %. Economists with the National Association of Realtors have predicted that previously owned home sales will expand by 9% this year. More here
Figures released by the U.S. Census Bureau and the Department of Housing and Urban Development show privately owned housing starts up 3.6 percent in October, which puts them 41.9 percent above last year’s rate. The improvement beat economists’ expectations and helped new residential construction hit its highest rate in more than four years. Building permits, on the other hand, slipped from September, falling 2.7 percent. Despite the dip, they are still up nearly 30 percent above last year’s rate. Also, single-family authorizations posted a 2.2 percent improvement in October. More here and here.
According to the outlook of a group of economists recently gathered by the National Association of Home Builders, the housing market is recovering steadily and should continue to gain momentum though next year and beyond. David Crowe, NAHB’s chief economist, said we’re seeing a more robust housing sector than other parts of the economy due to rising home prices across the nation. The NAHB is forecasting a 21 percent increase in housing starts this year and an additional 26 percent climb in 2013. Mark Zandi, chief economist of Moody’s Analytics, believes low mortgage rates, job market gains, and less economic uncertainty will lead to an acceleration in GDP growth as well as new home construction. A big part of this optimism is the housing market, Zandi said. Also, NAHB’s vice president of forecasting and analysis, Robert Denk, said that housing production should be 55 percent back to normal by the end of next year. More here.
Estimates released by the U.S. Department of Housing and Urban Development and the U.S. Department of Commerce show sales of newly built single-family homes at a seasonally adjusted annual rate of 369,000 in May. That is 7.6 percent above the revised April rate and nearly 20 percent above May 2011. The spike in sales exceeded economists’ expectations and put sales at a two-year high. The median price for a new house sold in May was $234,500; the average price was $273,900. The seasonally adjusted estimate of new houses for sale at the end of the month was 145,000. That represents a 4.7-month supply at the current sales rate. More here and here.
The economy added 227,000 jobs in February and surpassed economists’ expectations, according to the U.S. Bureau of Labor Statistics. Employment improved in professional and business services, health care and social assistance, leisure and hospitality, manufacturing, and mining. The official unemployment rate was unchanged at 8.3 percent. The gains make it seven-straight months with at least 100,000 jobs added, which is the longest streak since 2005. Continued improvement in the labor market, combined with high affordability and increasing consumer confidence, is key to a significant and sustained housing-market recovery. More here and here.
The U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Sales report for January shows sales of new single-family homes were 0.9 below December’s upwardly revised annual rate of 324,000. The revision to December’s rate, previously reported to be 307,000, put that month’s sales pace at a year-long high. And, despite slipping from last month, January’s sales pace exceeded economists’ expectations and were 3.5 percent above last year. The median sales price of new houses sold in January was $217,000, up from $210,300 in December. At the end of the month, there was a 5.6-month supply of new homes for sale at the current sales pace. More here.
The U.S. Census Bureau and the Department of Housing and Urban Development’s new residential construction statistics for January show privately-owned housing starts rose to a seasonally adjusted annual rate of 699,000, exceeding economists’ expectations. The increase put starts 1.5 percent above December and 9.9 percent above the year before, when the annual rate was 636,000. Permits to build rose 0.7 percent over December and are 19.0 percent above January 2011. More here.
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The S&P/Case-Shiller Home Price Indices, the most closely followed measure of national home values, registered a decline of 0.7 percent for their 20-city composite index through November, a bigger drop than the 0.5 percent forecast by economists. David Blitzer, chairman of the index committee at Standard & Poor’s, said price weakness continued despite low interest rates and better real GDP growth in the fourth quarter. Some analysts believe sellers are becoming more flexible on prices than they have been in the past, which would account for prices softening at the same time sales, sentiment, and the broader economy have shown improvement. More here and here.