Economists at the National Association of Realtors’ (NAR) annual conference, currently underway in Anaheim, California, expect to see gradual improvements in the housing market throughout 2012. Existing-home sales this year have risen 4 to 5 percent, and new home sales have substantially risen from the year’s record low – leading speculators to forecast improvements in what has been a stagnant economy for the housing industry.
Lawence Yun, chief economist of NAR, projected the gross domestic product growth to be 1.8 percent for 2011, and believes this number will rise to 2.2 percent in 2012. He also foresees the unemployment rate declining to 8.7 percent by the second half of 2012.
“Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently,” Yun said at the conference, reported on HousingWire.com. “Nonetheless, there is a sizable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely.” Yun also believes that by the middle of 2012, mortgage interest rates would rise to 4.5 percent.
Updates from the NAR conference predict that new-home sales in 2012 will rise by about 23 percent to 372,000 – a sizeable increase from the record low of 302,000 in 2011. Housing starts are predicted to rise nearly 8 percent to 630,000 – a rise from the 583,000 starts in 2011.
“Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970,” Yun said. “Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities.”