We’ve all had a tough past few years. It’s been a roller coaster ride that none of us asked to get on, and I think we are all ready to get off. I’ve said many times over the past few years that things are looking up, but I think the economic data really supports that forecast this time.
Home prices are increasing. Looking at average home price year over year, change from 2012 over 2011 ranges from a 5.5% to a 13.3% increase, depending on the price index you use. That trend continues into this year. When asked, nearly 50% of consumers expect their home to increase in value over the next 12 months, a 15% increase over this time in 2012.
Although the employment numbers that just came out were weaker than analysts had hoped for, construction jobs were one of the bright spots. Construction jobs increase by 18,000 in March and 91,000 in the first quarter of 2013. Since the low of January 2011, construction jobs are up 367,000.
Finally, construction activity is up. New single family homes spending rose 34% from February 2013 compared with 2012. More importantly, nominal construction spending has increased 74% since bottoming out mid-2009. NAHB expects housing starts to increase 23% in 2013 and 29% in 2014.
Signs are all pointing in a positive direction. While I think the past few years have cautioned us against getting too excited, we should be able to look forward to moderate positive growth in housing and construction this year.