Monday, October 29, 2012

Wells Fargo raises Housing Forecasts for 2013 and 2014

by Bill McBride on 10/29/2012 04:26:00 PM

Near the end of the year, I collect housing forecasts from a number of analysts. From Mark Vitner and Anika Khan at Wells Fargo:

We have raised our forecast for new home sales and housing starts in 2013 and 2014 due to recent reports from homebuilders, strong gains in building permits and starts, record low new home inventories, and the Fed’s stated intentions to purchase large quantities of mortgage-backed securities on an ongoing basis. ...

[G]iven the strong gain in permits, which are running slightly ahead of starts, the gain in the Wells Fargo/NAHB Homebuilders’ Index and robust orders data from several large homebuilders, we raised our expectations for 2013 and 2014 to 990,000 and 1.17 million homes, respectively.
Wells Fargo is now forecasting total starts of 990 thousand in 2013, and 1.17 million in 2014 (from around 770 thousand in 2012).

They are forecasting single family starts of 680 thousand in 2013, and 820 thousand in 2014 (around 530 thousand this year).

Their forecast for new home sales is 465 thousand in 2013, and 530 thousand in 2014 (from 370 thousand this year).

That is an increase of around 25%+ next year, and an additional 15% to 20% in 2014.

For 2012, Wells Fargo forecast 350 thousand new home sales, 457 single family starts, and 690 total starts. All too low.