21 Dec Market Outlook For The New Year
As 2012 comes to a close, the U.S. housing market remains one of the bright spots of the economy. In November, existing home sales rose 5.9% to an annualized rate of 5 million, beating what experts predicted on Wall Street. Last month was the 17th consecutive month of the housing market growing, and the highest level of sales since November 2009! Adding to the good news: The national price for an existing home rose 10.1% to $180,600 in November.
“I think housing is going to continue to improve,” says Mark Zandi, chief economist at Moody’s Analytics. “So for the next 3 or 4 years we will see better home sales, more housing construction and higher house prices. All of which is good news for the economic recovery.”
Even though there is roughly 3 million homes out there in foreclosure, Zandi is very optimistic about housing market due to buyers demand.
Here are the key points of his housing outlook for next year and beyond:
The recovery looks to be healthy, and growing, for the next 2-4 years.
Expect a rise in sales, construction and prices, which could positively impact GDP. “Housing is a small share of GDP but can be a big part of GDP growth,” Zandi says.
Investor demand for foreclosed properties will be high.
An increasing rate of household formation will lead to greater demand.
New home construction will pick up.
Home prices will rise by mid-to-high single digits in 2014 and 2015.