2014 looks to be a positive year for builders, with an expected 25% gain in housing starts over 2013, the National Association of Home Builders said.
The biggest gain will be with single-family houses, expected to pick up by 32%, NAHB said in a written “Eye on Housing” report. This is on top of a nearly 18% increase in housing starts in 2013, which NAHB expected to total 921,000 units.
Among the factors NAHB cited:
- After a week fall, more housing starts in November carried annualized starts above 1 million units for the first time since 2008. Single-family starts were up by more than 20%, according to government figures, while multi-family starts rose nearly 27% from October.
- There was an increase in the total number of single- and multi-family starts for 27 consecutive months, starting with 413,000 in August 2011 and rising to 685,000 by last November.
- Builders expressed a higher level of confidence, as reflected in the NAHB/Wells Fargo Housing Market Index. December’s index of 58 was 37 points higher than it was a year earlier.
New homes sold at a “steady” rate in November. NAHB said that Census Bureau statistics showed a 2% decline in sales from October to November but added that the drop was “statistically insignificant.”
Interest rates are higher than they were in 2013, and NAHB sees increases ahead. Citing figures from the Federal Housing Finance Agency, NAHB said the average contract interest rate for new-home-purchase loans was 4.26% in November. NAHB said it expected the 30-year rate to rise to an average of 4.8% in 2014, and to 5.6% next year.
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