Wells Fargo published their October report on housing forecasts. This is a national perspective and does not paint a pretty picture. There is nothing in the report that I found as shocking despite the headline. The 2nd half of the decade is just 3 years away, and we have covered forecasts from 2 years to 8 years away.
Even though there really isn’t much new with this report it provides some great data and perspective.
We have lowered our near-term forecast for new home sales and single-family construction, and stretched out the recovery period needed to bring housing starts back to a more normal level of around 1.5 million units. We now see housing starts totaling just 575,000 units in 2011 and look for starts to rise 11 percent next year to 640,000 units, with most of the gain coming from apartment construction. Housing starts are not expected to return to a 1.5 million-unit pace on a sustained basis until the second half of the decade.
Yet new home sales did perk up a bit in September. The latest Census data show sales rising 5.7 percent to a 313,000-unit pace. While the 5.7 percent increase garnered some headlines, the gain reflects only a modest change in activity. Sales have averaged a 300,000-unit pace over the past 15 months, and September’s 17,000-unit increase is well within the range of the typical month-to-month fluctuations during this period. Moreover, initial reports on home sales have often been revised substantially the subsequent month. Even with the increase, new home sales will likely finish the year at a modern era low of just 303,000 units.
Read Full Report
- Housing Starts up for September 2011 (craigkamman.com)