Sun comes out for housing starts
Home sales should bottom out by the end of the first quarter of 2008, and housing starts are expected to start rising in the third quarter, according to the most recent forecast of the National Association of Home Builders (NAHB). Speaking at an Oct. 24 housing conference, NAHB economist David Seiders pointed to a number of positive economic factors, including job growth, controlled inflation and short-term interest rate cuts.
The NAHB is predicting 828,000 new single-family homes for 2007 and 781,000 for 2008, a 5.6 percent decline. Total housing starts are expected to register 1.36 million this year and 1.2 million next year, an 11.9 percent decline.
Addressing the subprime mortgage crisis, Mark Zandi, an economist at Moody’s, predicted that certain regions of the country would receive more negative fallout than others. Among them are Arizona; California; Florida; Nevada; Boston; Washington, D.C.; the New Jersey coast; and the Carolinas.
Michael Moran, chief economist of Securities America, pointed out that subprime loans hold a 13.5 share of the mortgage market, and only 20 percent of these loans are “under stress.”
Most recently, the U.S. Commerce Department released housing starts data showing September saw the slowest pace of new residential building in 14 years (since March 1993) when 1.08 million units were under construction in the United States.