Many economists believe home construction will continue to rise in 2014.
Chicago, IL (PRWEB) January 21, 2014
The U.S. Census Bureau and the Department of Housing and Urban Development released their New Residential Construction statistics this morning, revealing housing starts for 2013 totaling about 923,400. CF Funding is happy to share that this number beat 2012’s figures by about 18.3 percent. The fourth quarter of 2013 produced the highest number of starts since the second quarter of 2008. However, we are still far below our long-term average of about 1 million.
According to census.gov, “The data are for new, privately-owned housing units, excluding 'HUD-code' manufactured (mobile) homes. The data are from the Building Permits Survey, and from the Survey of Construction (SOC)…” The press release contains information regarding building permits, housing starts, and housing completions.
Building permits were up in 2013 from 2012, but December’s numbers decreased from November. Privately-owned housing units authorized by building permits were down about 3 percent from November, but 4.6 percent above the December 2012 estimate. About 762,000 new housing units were completed in 2013, which is 17.4 percent above 2012’s numbers.
Some experts believe that the spike in interest rates in mid-2013 caused a slow in housing starts. However, a video report from CNBC published on January 17th suggests that we are building homes too quickly anyway. The amount of empty homes is still relatively large compared to the amount we saw during the housing boom, which may prevent home values from going up as high as their potential. However, as long as we continue to build and keep inventory, home prices will stay reasonable for homebuyers. Many economists believe home construction will continue to rise in 2014.
According to the Joint Center for Housing Studies at Harvard University, “The double-digit gains in annual home improvement spending projected for the first half of the year should moderate some to just under 10 percent by the third quarter.” These predictions were posted in the Leading Indicator of Remodel Activity (LIRA), released on Thursday. This report is designed to predict homeowner remodeling activity, and is posted 3 weeks after each quarter’s closing. The next report will be posed on April 17.
Eric S. Belsky, managing director at the Joint Center, had stated in the press release that owner confidence has a lot to do with the increase in housing starts and home prices. CF Funding agrees with this statement, as we have reported in previous articles: “The increase in positive equity over the third quarter has encouraged many homeowners to take on remodeling projects due to the increased confidence in their home’s value… We expect builder confidence to continue to rise as the housing market improves in 2014.”