As mentioned in an earlier blog, home prices across the nation are rising as it joins the rest of the nation in a recovery –albeit slowly- economy.
How is this happening, you might ask. NAHB Chief Economist David Crowe claims the following points are helping this economy along:
►Pent-up household formations
►Rising consumer confidence
►Increasing builder confidence in all three legs of the industry: Remodeling, multifamily and single-family construction;
►Growing rental demand
►More than 100 metros currently on the NAHB/First American Improving Markets Index
Crowe also says that NAHB is forecasting a 21 percent increase in single-family starts this year to 665,000 units in 2013. The 2015 housing market and the push for new construction will definitely help when it comes to employment rates across the country as well by 2015. Job growth by 2014 will most likely go from two million per year to closer to three million in 2014 and 2015.
It’s important to keep the optimism going, it will help the market if people truly believe that we are on the way to recovery. When the economy goes up, people feel better and when people feel better and they’re financially secure, they are more apt to buy that dream home they’ve been thinking about.
Moreover, remember that this market and optimism will also be driven by the Federal Reserve’s role in keeping mortgages rates low through 2015, operating under assumption that banks will take advantage of near zero lending rates from the ‘window’ and turn this around to broadening qualifying requirements.
Remember, however, that banks, are still recovering from losses from the bust, so it is unlikely that this will occur to the extent that would do us well, if at all, which could turn the optimistic forecast we just reported on. Be on the lookout. As it is, it seems relatively unlikely that banks will be interested in reducing margins any time soon so that they can instead wait for more certain business conditions instead of these optimistic market conditions. Whatever does happen, the one thing for sure is that the housing recovery isn’t going to be growing without a great deal of effort by policy makers, bankers and real estate agencies.