Daily Real Estate News recently reported that housing starts are expected to increase in 2011. But by how much? It depends on who you ask.
During an economic update at the International Builders’ Show in Orlando on January 12, David Crowe, The National Association of Home Builders’ chief economist, said that projected single-family home starts are expected to rise by 21% in 2011, reaching 575,000 units. Crowe cited an improving economy and job market, which means more homes will be built in 2011, with this upward trend continuing into 2012. The biggest challenge is the access to capital smaller builders might not have because of stricter lending requirements.
Lawrence Yun, chief economist of the National Association of REALTORS, painted a rosier picture. On December 30, Yun projected 716,000 housing starts this year. Like Crowe, he sees a better outlook for the economy and the job market. He sees an additional 2 million jobs in 2011. If the strict lending requirements are loosened with safe underwriting standards for creditworthy buyers, Yun said, there would be a bigger boost to the housing market and more economic benefits.
Yun said the growing population is also the reason why housing starts will jump this year. The U.S. population has added 27 million people over the past 10 years. A growing population will spur home construction and sales.
Edward Sullivan, chief economist of the Portland Cement Association, had the lowest estimate at 492,000 new housing starts. He said at the International Home Builders Show that he does not expect a significant increase in housing starts until next year due to tight lending standards, a high home inventory count and unstable housing prices. He also said that new home construction in the U.S. will vary by region.