With the year off to a rough start, many economists are searching for positive indications regarding U.S. economic prospects. One of the economic segments associated with significant optimism is the market for new homes. It’s not as if there aren’t headwinds facing the new homes marketplace, including potentially higher interest rates, volatile financial markets and falling oil prices, which are rocking the economies of parts of Texas, Louisiana and other states.
As reported by the Wall Street Journal, concerns regarding housing affordability and a shortage of construction workers are also slowing the pace of building. But these headwinds are likely to be more than countervailed by strong employment growth, wage growth, faster household formation and steep rent increases, which are driving more renters to consider homeownership.
David Crowe, chief economist at the National Association of Home Builders, expects single family housing starts, which were just fifty five percent of normal historical levels for much of last year to rise to sixty five percent of normal levels in twenty sixteen. They could rise to eighty seven percent of normal levels next year. Sales of newly constructed homes rose nearly fifteen percent during the first eleven months of twenty fifteen.
