Home building looks bright in 2014Posted 01/08/2014
Sunny and clear. That’s the outlook for the housing industry this year, according to the National Association of Home Builders (NAHB), which issued the forecast today in its Eye on the Economy newsletter.
“The prospects for home building in 2014 are bright,” the NAHB states, adding that total housing starts are predicted to rise nearly 25 percent this year, with a 32 percent increase in single-family construction and 8 percent growth in the multi-family sector. The year’s anticipated gains follow on the heels of 2013’s 18 percent improvement in residential construction. Approximately 921,000 housing permits were issued last year, the NAHB reports.
Consistent with the increase in construction activity, builder confidence also finished strong in 2013. The December NAHB/Wells Fargo Housing Market Index rose four points to 58, as builders recovered from doubts harbored during October and November. The December index is 37 points above December 2011’s levels, and builders’ optimism improved in all three areas of measurement, including current sales, expected sales and traffic.
Looking ahead, the NAHB anticipates housing growth to be tempered by rising interest rates in the coming months, partially due to the Federal Reserve’s announcement that it will begin tapering its Quantitative Easing program of asset purchases. NAHB expects the 30-year mortgage interest rate to increase, on average, to 4.8 percent and 5.6 percent in 2014 and 2015, respectively.
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