WASHINGTON – Housing starts are expected to make gains in 2010, but the rate of growth will be hampered by the nation’s double-digit unemployment levels, according to David Crowe, chief economist of the National Association of Home Builders.

Crowe said the end of the economic recession along with the continuation of low mortgage interest rates and stabilizing housing prices will result in increased housing starts. Improvements, however, will come slowly, they said, as high unemployment levels continue to discourage consumers and push home foreclosures higher.

Crowe warned that this remains "a cautionary period" for housing, largely because of the discouraging level of joblessness, which he forecast will peak at 10.2% in the first quarter and remain elevated, exceeding 8.0% at the end of 2011.

NAHB is forecasting 697,000 total housing starts in 2010, up 25.6% from an estimated 555,000 units last year, which is well off normal years. However, this year’s recovery will occur entirely in the single-family sector, where starts are forecast to rise 37.7% from 443,000 last year to 610,000, he said. Suffering from an acute shortage of available financing, multifamily starts are expected to lose further ground in 2010, slumping to 87,000 units, down 22.3% from last year’s 112,000 level. In 2008, 285,000 multifamily units were started, which is near the level that is needed to keep the supply in balance with demand.

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