As we usher in the 2015 National Association of Home Builders (NAHB) International Builders’ Show (IBS) we can be optimistic that the housing market will continue to pick-up based on some emerging trends.
CertainTeed was honored recently to present a manufacturer’s perspective to the Federal Reserve on the state of the construction industry and what changes need to take place to improve existing home sales and pave the way for new construction.
2014 did not turn out to be as robust a recovery as we hoped. I think we can all agree that, even though it was the best year in housing starts in recent memory, it fell short of expectations. Tight mortgage credit significantly crimped first-time home buyers. According to the National Association of Realtors first-time home buyers accounted for 33 percent of the nation’s housing market in 2014 – the smallest share since 1987 and down from 38 percent in 2013. The lack of first-timers makes it difficult for trade-up buyers to sell their homes creating a domino effect hurting new home sales and single-family construction.
So why do I feel that we will see resurgence in the housing market in 2015?
- JOBS – Payroll employment rose by 252,000 in December, and the unemployment rate declined to 5.6 percent. Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing. Jobs and income growth usually boost consumer confidence and positive feelings about home ownership.
- MILLENNIALS – With more than three million 19 to 34 year olds living with their parents until they are gainfully employed and able to begin looking for that starter home, the uptick in job creation is good news. Once employed they will make plans for marriage, first home and family.
- LENDING – Mortgage finance giants Fannie Mae and Freddie Mac recently signaled a willingness to lend by lowering their minimum down payment requirement from 5 to 3 percent.
Industry experts suggest a more steady growth year of 16 percent, driven more by growth in single-family starts which is expected to grow 21 percent.
Let’s hope they are right.
If you are attending IBS, stop by and visit our booth at Central Hall C2127.