American consumers are feeling very confident in the housing market as of late – the National Association of Realtors reports that 69% of Americans believe now is a good time to buy a home – and they’re not alone in their optimism about the real estate industry! Economists who participated in the recent 2014 Spring Construction Forecast Webinar for the National Association of Home Builders (NAHB) also share this confidence in both the housing market and the overall economy as well.
According to the NAHB, the housing market’s upward trend can be expected to continue for several reasons, including a growing economy, affordable home prices, competitive mortgage rates and pent-up demand. As a new home builder, Christopher Companies always welcomes great news about the housing industry, and we’re excited to see how the housing market and economy continue to improve!
High consumer confidence matching pre-recession levels, coupled with an increase in purchases of vehicles and home furnishings, indicates that consumers will continue to be able to purchase “big ticket” items, such as houses, according to NAHB. And though mortgage rates are expected to rise slowly by the end of 2015, NAHB chief economist David Crowe states that they will “not be a significant deterrent” to an improving housing market. In fact, increasing mortgage interest rates can be viewed as a positive sign, as they reflect an increase in economic growth and credit demand.
New home sales and housing starts – sectors of the industry that Christopher Companies is particularly interested in – are both expected to strengthen through this year and 2015. New home sales are predicted to increase an impressive 29% from 2013 to 557,000 this year. There are also a predicted 700,000 single-family housing starts for this year and 900,000 single-family housing starts for 2015, according to Maury Harris, managing director and chief U.S. economist at UBS Securities.
The strength of the housing market is heavily tied to the strength of the overall economy, which is predicted to strengthen as the unemployment rate drops to a forecasted 6.2% by the fourth quarter of 2015. Additionally, financial lending institutions have $2 trillion in excess reserves, and putting this money to use and increasing lending may also bolster the economy, according to Harris.
With both consumers and professionals having high hopes for the housing market and economy in the coming months, we can’t help but share their enthusiasm! At Christopher Companies, we’re proud to offer beautifully constructed, energy efficient new homes in the D.C. metro and Delaware’s Sussex County, and we’re excited for our future homeowners who will benefit from both our new homes and the expected strengthening housing industry!
SOURCE: National Association of Home Builders