WASHINGTON – Oct. 31, 2014 – A growing economy, rising household formations, low mortgage rates and pent-up demand will help single-family housing production to rev up in 2015, according to economists who participated in yesterday's National Association of Home Builders (NAHB) 2014 Fall Construction Forecast Webinar.

The economists also said that renter growth will keep the multifamily market at cruising altitude or higher.

"Single-family builders are feeling good. They are not overly confident, but confident enough to keep moving forward," says NAHB Chief Economist David Crowe. He says the single-family sector will finish out the year much stronger than it began, and he set the stage for a robust 2015.

"This is mostly due to significant pent-up demand, and steady job and economic growth that will allow trade-up buyers who have delayed home purchases due to job insecurity to enter the marketplace," say Crowe.

New-housing forecast

NAHB forecasts 991,000 total housing starts in 2014, an increase of 6.6 percent from 930,000 units last year.

Single-family production is expected to rise 2.5 percent this year to 637,000 units, increase an additional 26 percent next year to 802,000 and reach 1.1 million in 2016.

The economists used the 2000-2003 period as a benchmark for "normal housing activity," and, in comparison, single-family starts in the third quarter of this year are 48 percent of normal. However, NAHB predicts that they'll rise to 90 percent of normal by the fourth quarter of next year.

Multifamily starts, which Crowe says are currently at a normal level of production, are projected to increase 15 percent by the end of this year and hold steady in 2015.

Meanwhile, the NAHB Remodeling Market Index matched its all-time high of 57 in the third quarter of 2014, and it's been above 50 for six consecutive quarters. A reading above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it's lower.

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