There has been a flurry of media stories regarding the latest housing data that suggest the recent momentum in the housing market has stalled and the industry is heading toward another downturn.
Although the latest monthly housing data showed modest declines, the less volatile quarterly data have continued to show modest improvement. Consequently, there is plenty of evidence for retaining a cautious optimism for a gradual recovery. While the February new-home sales rate dipped a nominal 1.6 percent, sales are still running 11.4 percent above their year-ago level and at the rate expected for the slow recovery. Meanwhile, the inventory for new-homes for sale remains at an all-time record low.
While combined U.S. housing starts lost some ground in March, this was almost entirely due to typical month-to-month volatility on the multifamily side. The fact is that single-family and multifamily starts and permits were all stronger in the first quarter of 2012 than they were in the fourth quarter of 2011, indicating that the market continues to slowly strengthen, albeit in fits and starts.
We are also seeing the long-term improvement in housing conditions continuing to take hold in a growing number of local markets. The April NAHB/First American Improving Markets indicates that 101 individual metros are showing measurable and consistent signs they are heading in the right direction.
Total job growth continues upward, providing added consumer confidence and pushing personal income up.
No one is anticipating that an upward path for housing will run in a straight-line trajectory. The economy is in an uneven recovery and we can expect some corresponding ups-and-downs in the housing market in the months ahead.
However, NAHB believes that on the whole, we can expect a slow and gradual recovery in housing starts, home sales and the overall housing market in 2012. We will provide more details on our perspective on national and regional housing trends at the Spring NAHB Construction Forecast Webinar on Wednesday, April 25 from 2 p.m. to 4 p.m. Eastern time.
Those who wish to register can do so by logging on to www.nahb.org/cfw.