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National Association of Home Builders.
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Home Building Forecast
Calls for Further Growth
WASHINGTON, D.C.
From Eye on the Economy,
a National Association of Home Builders newsletter.
All segments of the home building industry should continue to grow in 2013, according to the NAHB Economics housing and economic forecast. Single-family and multifamily construction will see strong growth rates, with remodeling experiencing lesser but still positive growth. Driven by demographic factors, the 55+ sector should witness growth comparable to that of single-family and multifamily building.
Growth in the housing industry remains critical for the economy as a whole, as the preliminary fourth-quarter GDP report from the Bureau of Economic Analysis demonstrates. Due to declines in government spending and business inventories, the initial estimate for economic growth for the last three months of 2012 turned down at -0.1%. However, home building (residential fixed investment or RFI) was a net contributor on the growth side of the equation for the seventh consecutive quarter.
For the final quarter of 2012, RFI added 0.36 percentage points to GDP, the second highest tally since the end of the Great Recession. Put another way, had home building been flat for the quarter, the initial estimate for fourth-quarter GDP would have been strongly negative at 0.46%.
NAHB expects this growth for home building to continue. For the single-family market, there were 535,500 total starts for 2012, a 24% increase over 2011. The current rate of single-family construction is now up 74% from the market low point of March 2009 but represents only 44% of "normal" conditions (levels of activity comparable to the period of 2000 through 2003).
For 2013, we forecast that single-family starts will total 650,000, a growth rate of 22%. And we expect that growth to accelerate into 2014, when single-family construction will grow another 30%.
Multifamily construction will continue expanding into 2013. The rebound of the multifamily sector has come more easily than other parts of the housing industry due in part to the strong demand for rental properties. After 56% growth off market lows in 2010, multifamily starts totaled 244,500 in 2012, a growth rate of 37%. NAHB expects this trend to continue, with slowing but still positive growth in future years.
For 2013, we forecast a multifamily starts total of 299,000, a 22% increase over the prior year. And in 2014, we expect a smaller 6% growth rate to reach a starts total of 317,000.
Remodeling should also benefit from generally improving housing conditions. Total remodeling activity was up 4.5% from 2011 to 2012, despite the temporary sunset of a commonly claimed energy-efficiency tax credit for existing homes (that credit was extended in the fiscal cliff deal retroactively). For 2013, NAHB forecasts additional 2.4% growth, with 1.7% for 2014.
The across-the-board growth forecast for the housing sector should result in job gains in 2013. NAHB estimates find that on average every single-family home built creates enough work to create three jobs. Correspondingly, every multifamily unit constructed and every $100,000 in remodeling expenditures each generate one job.
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Navy chair.
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Restoration Hardware
Will Cease Selling the "Naval Chair"
HANOVER, PENNSYLVANIA
Emeco Industries has announced that its dispute concerning Restoration Hardware's "Naval Chair" product line has been settled. As part of that settlement, Restoration Hardware has agreed to permanently cease selling the chairs that Emeco accused of infringement, and its existing inventory of such chairs will be recycled. Emeco's Navy Chair products are available for sale directly from Emeco and from authorized retailers. |
