by Bill McBride on 11/08/2014 08:01:00 AM
Saturday, November 08, 2014
Update: On Nov 8th I added the MBA forecast.
Towards the end of each year I collect some housing forecasts for the following year, and it looks like most analysts are optimistic for 2015.
The NAR released their forecast yesterday: Home Sales Expected to Improve in 2015, but Some Headwinds Still Remain
[Lawrence Yun, chief economist of the National Association of Realtors®] expects the national median existing-home price to rise 4 percent both next year and in 2016. ... Housing starts are forecast to hit 1 million this year and reach 1.3 million in 2015, which is still below the underlying demand of about 1.5 million, but should gradually normalize as lenders open their credit box more to builders. New-home sales are likely to total 440,000 in 2014, and increase to 620,000 next year.Note: Wells Fargo updated their forecast (slight changes).
Here is a summary of forecasts for 2014. In 2014, new home sales will be around 440 thousand, and total housing starts will be close to 1 million. No one was close on New Home sales (all way too optimistic), and Michelle Meyer (Merrill Lynch) and Fannie Mae were the closest on housing starts (about 10% too high).
In 2014, many analysts underestimated the impact of higher mortgage rates and higher new home prices on new home sales and starts.
Note: Here is a summary of forecasts for 2013. In 2013, new home sales were 429 thousand, and total housing starts were 925 thousand. Barclays were the closest on New Home sales followed by David Crowe (NAHB). Fannie Mae and the NAHB were the closest on housing starts.
The table below shows a few forecasts for 2015 (I'll update these in further in December).
From Fannie Mae: Housing Forecast: October 2014
From NAHB: Single-Family Production Poised to Take Off in 2015
I don't have Moody's Analytics' forecast, but Mark Zandi, chief economist at Moody's Analytics said today "that single-family starts could be closing in on 1 million units by the end of 2015 and multifamily production could go as high as 500,000 units." That seems too high.
I haven't worked up a forecast yet for 2015.
|Housing Forecasts for 2015|
|New Home Sales (000s)||Single Family Starts (000s)||Total Starts (000s)||House Prices1|
|1Case-Shiller unless indicated otherwise|
2FHFA Purchase-Only Index
3NAR Median Home price
4Zillow Home Value Index, Sept 2014 to Sept 2015