Housing Should Continue Expansion Through 2015

Washington, DC, April 25, 2014 --  A growing economy, pent-up demand, competitive mortgage rates and affordable home prices will keep housing on an upward trajectory through 2015, according to economists who participated in the National Association of Home Builders 2014 Spring Construction Forecast Webinar.

However, several obstacles including tight consumer credit, shortages of lots and labor and rising materials prices are hindering a more robust recovery.

“Housing needs an improved economy,” said NAHB Chief Economist David Crowe, adding that the economy is expected to respond as payroll employment continues to grow and the unemployment rate slowly recedes from 6.7 percent in the first quarter of this year to 6.2 percent by the fourth quarter of 2015.

Consumer confidence is back to pre-recession levels and the purchase of motor vehicles and home furnishings are on the rise, indicating that consumers are increasingly willing to buy big ticket items such as houses.

Reflecting an increase in credit demand and economic growth, mortgage interest rates are projected to rise to 5 percent by the end of 2014 and 6 percent by the end of next year. Noting that these rates are still low by historical standards, Crowe said this would “not be a significant deterrent to expansion in the housing market.”

With new-home sales averaging just 8.8 percent of total home sales, barely half the historical average of 16.1 percent, Crowe observed that “this is another reason to believe that the new-home market will have to make up existing ground.”

However, he cautioned that builders continue to face a number of headwinds.

“Supply constraints related to lots and labor and rising lumber, gypsum and OSB (oriented strand board) prices are hurting the ability of builders to meet demand,” he said.

“Moreover, creditworthy borrowers, particularly younger families and first-time home buyers, are having difficulties in getting home loans.”



Other Archived Articles

Gerflor Acquires Connor Sport Court   Full Article
Chicago, IL, Nov. 5, 2014 -- Gerflor said it has acquired Connor Sport Court of Amasa, Michigan.

Armstrong Illinois Plant Wins Sustainability Award   Full Article
Lancaster, PA, Nov. 5, 2014 -- Armstrong Flooring said its Kankakee, Illinois manufacturing facility has received the 2014 Illinois Governor’s Sustainability Award.

Services Sector Continues To Grow in October   Full Article
Washington, DC, Nov. 5, 2014 -- The services sector of the economy continued to expand in October but at a slower pace, according to the Institute for Supply Management.

Mortgage Applications Fall Last Week   Full Article
Washington, DC, Nov. 5, 2014 -- Mortgage application volume fell last week as interest rates increased, according to the Mortgage Bankers Association.

Businesses Add 230,000 Jobs in October   Full Article
Roseland, NJ, Nov. 5, 2014 -- Private employers added 230,000 jobs in October, payroll processor ADP said.

Earthwerks Names Head of Product Development   Full Article
Houston, TX, Nov. 5, 2014 -- Earthwerks has named Lindsey Nisbet head of product development and marketing strategy.

Linron Names de Beaumont VP Business Development   Full Article
Houston, TX, Nov. 5, 2014 -- Linron Co. has named Gilles de Beaumont, vice president of business development.

Domotex Asia Anticipates Larger Wood, Laminate Area   Full Article
Shanghai, China, Nov. 4, 2014 -- It will require four dedicated halls to house just the wood and laminate exhibitions at Domotex asia/Chinafloor’s 17th annual flooring show March 24-26 in Shanghai, organizers said.

Factory Orders Decline in September   Full Article
Washington, DC, Nov. 4, 2014 -- New orders for manufactured goods fell for second straight month in September on softness in the aircraft sector.

Lexmark Names Wellman Director of Architecture, Design   Full Article
Dalton, GA, Nov. 4, 2014 -- Lexmark Carpet said that Jennifer Wellman has been named director of architecture and design solutions.

Shaw's Tuftex Wins Cool Planet Award   Full Article
Dalton, GA, Nov. 4, 2014 -- Shaw’s Tuftex Division won the 2014 Cool Planet Award, which recognizes Southern California Edison business customers for demonstrating exemplary leadership in energy and carbon management.

Q.E.P. Completes Acquisition of Flooring Trade Supplies   Full Article
Boca Raton, FL, Nov. 4, 2014 -- Q.E.P. said that it has completed the acquisition of Flooring Trade Supplies, an accessory distributor in Sydney, New South Wales.

Stifel Nicolaus Praises Mohawk's Performance   Full Article
New York, NY, Nov. 3, 2014 -- Analyst Stifel Nicolaus says it continues to recommend the stock of Mohawk Industries with a "buy" rating as Mohawk "continues to execute in a very impressive manner given the slower demand environment across the globe."

Manufacturing Expands at Faster Pace in October   Full Article
Tempe, AZ, Nov. 3, 2014 -- U.S. manufacturers expanded at a faster rate in October, according to the Institute for Supply Management.

Construction Spending Dips in September   Full Article
Washington, DC, Nov. 3, 2014 -- U.S. construction spending fell for a second consecutive month in September, according to the Commerce Department.

Share of First-Time Home Buyers Lowest in 27 Years   Full Article
Washington, DC, Nov. 3, 2014 -- First-time buyers have accounted for the smallest portion of home sales in 27 years this year, according to the National Association of Realtors.

Economists See Strong Year for Builders in 2015   Full Article
Washington, DC, Nov. 3, 2014 -- A growing economy, rising household formations, low mortgage rates and pent-up demand will help single-family housing production to increase in 2015.

Tarkett Acquires Carpet Maker Desso   Full Article
Paris, France, Oct. 31, 2014 -- Tarkett has acquired Dutch carpet maker Desso from Bencis Capital Partners.

Consumer Sentiment Highest in Over Seven Years   Full Article
Ann Arbor, MI, Oct. 31, 2014 -- U.S. consumer sentiment rose in October to its highest level in more than seven years, according to the Thomson Reuters/University of Michigan index.

Consumer Spending Declines in September   Full Article
Washington, DC, Oct. 31, 2014 -- U.S. consumer spending fell in September for the first time in eight months, according to the Commerce Department.