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Monday, January 16, 2012

Some Bullish Housing Forecasts for 2012

by Calculated Risk on 1/16/2012 01:14:00 PM

Earlier I posted some housing forecasts from analysts at Wells Fargo, Goldman Sachs, and added two more forecasts from Merrill Lynch and John Burns.

David Crowe, chief economist at the National Association of Home Builders has put out his forecasts (excel) calling for new home sales to increase to 360 thousand in 2012 (from 304 thousand in 2011), and for housing starts to increase 17% to 709 thousand. He forecasts single family starts will also increase 17% to 501 thousand. Crowe expects a significant increase in new home sales in 2013.

But here is the most optimistic forecast I've seen from Moody's via Julie Schmit at USA Today: Housing outlook is more upbeat

Existing home sales will rise 12% this year after a 2% increase last year, and new home sales, coming off a horrid year, will jump 74% this year, Moody's Analytics predicts.

Single-family housing starts will rise 37% this year, Moody's predicts, after falling 9% last year.
That would put single family starts (not total starts) at 687 thousand in 2012, and new home sales at 530 thousand.

Here is a table of some recent forecasts. I expect some increase in 2012 for both starts and new home sales, but I think the Wells Fargo / John Burns / NAHB forecasts are probably the upper range for 2012.

Some Housing Forecasts for 2012 (000s)
New Home SalesSingle Family StartsTotal Starts
Merrill Lynch1304427 
Fannie Mae336473704
Wells Fargo350457690
John Burns359 717
1 Merrill forecast is "sideways" in 2012