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2014 Housing Forecast to Build on 2013 MomentumJanuary 30, 2014
Heading into 2014, the housing forecast seems strong. 2013 will be remembered as a year in which the market gained strength. Just look at some of these numbers in US News.
A positive upward trend: Since December, the number of single-family and multifamily homes under construction had gone up for 28 consecutive months.
GDP numbers up: As of the third quarter 2013, the housing market’s share of the gross domestic product was 15.6%. Over just the last 12 months alone, that number is an astounding 26%.
With these statistics (and others) in mind, what will the housing market hold for 2014? Along with many experts, we believe it will be more of the same. There is just too much evidence to think otherwise.
The National Association of Home Buyers (NAHB) is actually forecasting a gain of nearly 25% in total housing starts, and an overall 32% spike in single-family constructions (source).
Need further proof? Despite a relatively week fall season in 2013, the final months rebounded nicely, evidenced by data from the Census and the Department of Housing and Development. Their research shows that for the first time since 2008, total housing starts topped the one million mark. The breakdown is as follows: single-family starts numbered 727,000 (the highest rate since 2007); multifamily starts totaled 364,000.
Speaking of multifamily construction, the NAHB foresees positive growth in this area, both in 2014 and beyond. Specifically, they predict an 8% increase in 2014 over last year, and they have data to back their claim. The Survey of Market Absorption of Apartments showed three-month absorption rates for rental and for-sale multifamily units rose for third-quarter dispositions of construction finished in the second quarter (source).
The good news gets even better. More construction means more jobs – a significant number of them. On average, every single-family home built produces a sufficient amount of economic activity to financially support three jobs for a 12-month period. When factoring in the anticipated housing increase, this means approximately half a million new jobs!