On Jan. 4, 2013, Bloomberg.com published an article by John Gittelsohn, titled “Housing a Sweet Spot for U.S. Economy as Recovery Expands”. According to Gittlesohn, U.S. home sales and prices are poised to rise in 2013, solidifying a recovery that began last year after a half-decade slump that was the deepest since the Great Depression, according to analysts and economists surveyed by Bloomberg.

 

Record-low mortgage rate and attractive prices, supported by declining unemployment are luring buyers as the inventory of distressed homes shrinks. Home builders are responding by adding supply, bolstering economic growth. “Everywhere we are, we can see it,” Larry Webb, chief executive officer of Aliso Viejo, California-based New Home, said in a telephone interview. “Talk about pent-up demand.”

 

Housing starts, including single- and multifamily units, are expected to increase 24 percent to 967,000 in 2013, the most since 2007, according to the median of 17 estimates. Starts will reach an annual pace of 1 million by the end of this year and 1.5 million by the end of 2016, according to a report today by Goldman Sachs Group Inc. analysts led by Hui Shan, who said housing will remain a “bright spot” in 2013.

 

Purchases of new single-family houses will climb 23 percent to 448,000 this year, extending last year’s rebound from a record low 306,000 in 2011, according to estimates of 17 analysts surveyed for this story. “We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand,” Mark Kiesel, managing director at Pacific Investment Management Co. in Newport Beach, California, wrote in an e-mail.

 

Increases in home prices, construction employment and consumer optimism can restart the “virtuous circle,” shifting housing from an economic drag to an economic engine, according to

Michael Widner, an analyst with Stifel Nicolaus & Co.

 

Based on home sales, construction starts and mortgage delinquencies, the housing market is “halfway back to normal,” said Jed Kolko, chief economist of Trulia Inc., a San Francisco- based real estate website operator. “It’s likely that it will be another three years or so — maybe the end of 2015 or the start of 2016 — before we see that market nationally back to normal,” Kolko said in a Dec. 26 interview on Bloomberg Television. “Some local markets, like HOUSTON and the San Francisco Bay area, are actually close to where the normal areas are. Whereas others, like Chicago and Atlanta, are a long, long way from normal.”

 

Source: Bloomberg.com

 

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