By Tim McLaughlin, Sr. Vice President, Weichert Financial
Continuing significant improvement can be expected in the housing sector, according to a semi annual forecast from the Urban Land Institute.
The outlook, which represents the median consensus from a survey of 38 of the country’s top real estate economists and analysts, is “very optimistic,” said Howard Roth, global and Americas director of real estate at Ernst & Young, “considerably more so” than the previous ULI poll conducted in September.
Participants are looking for strong growth in the housing sector through the remainder of this year and the next two. “This is where we see some of the most dramatic changes, and lots of optimism,” ULI senior vice president Dean Schwanke said.
The expectation is for 700,000 single-family housing starts this year, 900,000 in 2014 and 1.013 million in 2015. Just 535,000 houses were started last year. Also, prices are expected to rise 6% this year, 5.3% in 2014 and 5% in 2015. Despite the moderation, that is well above previous predictions.
These and other projections are based on a generally favorable outlook for the economy, with steady improvement anticipated in both growth and employment.
“When it comes to the economy, we see a lot of underlying strength,” said Suzanne Mulvee, director of research at Retail, Property and Portfolio Research in Boston and one of the survey participants.
About the only thing slowing growth is the federal government’s “fiscal instability,” Thorpe ventured. But otherwise, he said, “we’re starting to morph into a really strong economy.”
Borrowers with mortgages backed by Fannie Mae or Freddie Mac will now have until the end of 2015 to obtain new loans under the Home Affordable Refinance Program, the Federal Housing Finance Agency said Thursday.