As mortgage records show rates hovering at affordable levels and home price averages are seen appreciating nationwide as inventories fall, both economists and consumers may have at one point worried of conditions once again worsening to mirror those of a recession.
However, according to the Urban Land Institute/Ernst & Young Real Estate Consensus Forecast, a significant amount of optimism is shared among regional residential sectors and the single-family housing industry.
Housing starts are reportedly expected to increase to 700,000 this year, moving up from the record lows exhibited in 2009 and 2010 and the level of 535,000 seen just last year. In addition, the the organizations estimate starts will jump to 900,000 next year, before rising to about 1.013 million in 2015. The national average home price is expected to show improvement of 6 percent during this year, before slipping back to 5.3 percent next year and continuing on to 5 percent in 2015.
While the projections may look mixed, they are thought to reflect signs of a solid recovery of the national housing market, as consumer again begin to consider purchasing property. Ernst & Young's global real estate leader Howard Roth admitted that the American residential real estate sector still has a way to go toward full recovery, however, he said it is moving in the right direction and is likely to continue influencing individuals to get involved.
"Institutional global capital is searching for a home that provides the best risk adjusted return, without regard for borders," Roth said. "As the consensus of the economists participating in our survey confirms, the U.S. capital markets, the housing sector ... are clearly improving, trends which we believe places the U.S. real estate sector squarely in the sights of global investors for the foreseeable future."
Consumers remain positive toward housing
Even after being confronted with worries of budget sequestration and fiscal policy concerns, Americans are still reporting high levels of confidence for the continued bolstering of the national housing market.
The government sponsored enterprise Fannie Mae recently released its March 2013 National Housing Survey, which saw all-time survey highs of 48 percent of respondents reporting expectations that home prices will appreciate in the coming year and 26 percent believe now is a good time to sell a home. Additionally, 46 percent of consumers think the coming year will see an increase in mortgage rates, while just 6 percent expect them to depreciate.
As consumers' senses of safety and soundness see potential upticks in subsequent months and housing conditions show further improvement, the national residential sector may exhibit additional gains.