This month, housing industry experts from around the country met in Orlando, FL to forecast next year’s economic conditions. Industry leaders such as Lawrence Yun, chief economist of the National Association of Realtors, and Dennis Lockhart, president and CEO of the Federal Reserve Bank of Atlanta, kicked off the conference with a recap of this year’s housing industry conditions.
According to Lockhart, the main roadblock for the 2016 housing market was a low inventory level, as supply could never quite match the high demand for homes throughout the country. In fact, “demand and sales slightly weakened over the summer as stubbornly low supply limited buyers’ choices, accelerated price growth and hindered some consumers’ belief that now is a good time to buy a home,” Yun reported.
With developers working to expand their building potential, however, this is not projected to be a problem next year. More specifically, Yun predicts that home construction will increase by 5.3 percent, jumping housing starts to 1.22 million. In 2018, projected home sales are expected to jump even higher—to about 4 percent, or 5.68 million homes.
This increase is vital to the housing market, as “NAR surveys from both current renters and recent buyers prove that there’s an overwhelmingly strong desire among the younger generation to own a home of their own,” stated Yun. “The housing market over the next couple of years should get a big lift in demand from these new buyers. The one caveat is it’s essential that there’s enough new and existing supply at entry-level prices for them to reach the market.”
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