At the International Builders' Show in Las Vegas in January, David Crowe, chief economist for the National Association of Home Builders (NAHB), Washington, D.C., said the housing upturn that took root last year is expected to pick up momentum in 2013, but that “headwinds” along a number of fronts could impede the pace of the recovery.
“Nearly every measure of housing market strength — sales, starts, prices, permits and builder confidence — has been trending upward in recent months and we expect to see gradual but steady growth along these lines in 2013,” he said.
In particular, Crowe said house prices are up nearly 6% on an annualized rate over the past 10 months, and that, “This has been a trigger for demand to return. People feel comfortable if they buy a house that it will appreciate, not depreciate, in value.”
He cautioned that builders continue to face several challenges, including stubbornly tight mortgage lending conditions, inaccurate appraisals, rising materials prices and a declining inventory of buildable lots. Moreover, continuing gridlock in Washington over how much more fiscal tightening is needed to stabilize the debt-to-GDP ratio, along with calls for major changes to the mortgage interest deduction, threaten future housing demand.