A Jump In Building Starts Predicts More Choices For Buyers
Posted by Richard on February 12, 2020
After an unexpected late-year jump in single family housing starts in 2019, the Fannie Mae Economic and Strategic Research (ESR) Group has predicted higher single family housing starts and sales for 2020 than previously announced.
Housing starts represent the number of new homes begun during a period of time. The U.S. Census Bureau estimates the number by surveying permit holders and asking whether they’ve started construction, according to the National Association of Home Builders (NAHB).
Privately-owned housing starts were 13.6 percent higher than a year earlier, according to the Census Bureau.
The ESR group also removed its prediction of one rate cut in early 2020 and announced that it expects no moves from the Fed all year; the Fed cut rates three times in 2019. Rates for 30-year mortgages have dropped to about 3.6 percent.
The group further predicted that single-family housing starts will top one million new homes in 2021, a post-recession high. Privately-owned housing permits went up the most in the Northeast, followed closely by the Midwest. Permits were up slightly in the West and had fallen in the South.
Despite the expected increase in the pace of construction, the group said, supply remains tight and strong demand is driving prices higher, particularly in entry-level price tiers.