A panel of 49 economic forecasters expects housing starts will hit 1 million this year and 1.18 million in 2014 as home prices continue to rise, according to the National Association of Business Economics. Single-family and multifamily starts totaled 780,000 last year.
The consensus NABE forecast suggests a “rosier view” for 2013 and 2014 than the professional forecasters held in February.
As result of
Fannie Mae chief economist Doug Duncan expects the housing sector will “act as a tailwind for the economy” throughout this year and 2014.
“The housing market continues to grow at a sustainable, if not yet robust, pace,” he said Monday.
He noted there has been improvement in home purchase demand.
“If demand awakens further and more jobs are added each month, economic activity should step up compared to 2012 levels with housing acting as a significant contributor to growth,” the Fannie chief economist said.
New home sales have a higher economic impact than existing home sales because it generates construction jobs as well as jobs related to building materials and other sectors of the economy.
“The headwinds from the housing sector have eased, and housing market activity is likely to continue to contribute to GDP growth over the next few years,” according to Federal Reserve Gov. Sarah Bloom Baskin.
The Fed governor noted that housing starts averaged an annual rate of nearly 1 million units in the first quarter.
However, the inventory of new homes for sale is “quite lean” and mortgage credit remains tight.
“The rise in house prices over the past year or so has lifted household net worth and pushed some homeowners above water on their mortgages. These developments may help to ease credit for many households as well, although mortgage credit remains very tight,” she said.
