WASHINGTON – The National Association of Home Builders, in its 2014 Spring Construction Forecast Webinar, reported housing will stay on an upward path through 2015 as the economy keeps growing, mortgage rates stay competitive and home prices remain affordable.
Fueled by an improving economy and pent-up demand, NAHB projects that single-family housing production will increase 22 percent from 621,000 last year to 760,000 in 2014 and surge an additional 55 percent to 1.18 million units in 2015.
In addition, NAHB said, production of multifamily units is expected to rise 8 percent from 308,000 in 2013 to 331,000 this year, reaching what is considered a normal level of production.
NAHB added that several obstacles including constricted consumer credit, lack of lots and labor and growing materials prices are hampering a more robust recovery.
Mortgage interest rates are anticipated to increase to 5 percent by the end of 2014 and 6 percent by the end of next year, according to NAHB Chief Economist David Crowe. He noted that because interest rates are still low by historical standards, the projected increases should "not be a significant deterrent to expansion in the housing market."
New-home sales are averaging 8.8 percent of total home sales, barely half the historical average of 16.1 percent, Crowe said.
"Supply constraints related to lots and labor and rising lumber, gypsum and OSB (oriented strand board) prices are hurting the ability of builders to meet demand," Crowe said. "Moreover, creditworthy borrowers, particularly younger families and first-time home buyers, are having difficulties in getting home loans."
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