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Nation's Strong Housing Market Seen 'Simmering Down' In 2006

December 21, 2005 - Following strong growth over the past three years, home sales and housing production will ease back next year to around 2004’s historically healthy levels, according to economists participating in a teleconference hosted by the National Association of Home Builders (NAHB) yesterday.

Striking an overall positive tone, NAHB Chief Economist David Seiders and JP Morgan Chase Senior Economist James Glassman were largely in agreement in their forecasts for the coming year in terms of the outlook for housing and the overall economy.

“We ’re looking for a good economy through 2006, with GDP growth remaining strong and with job creation running at roughly the same pace as in 2005 – key positive factors in the housing outlook,” said NAHB’s Seiders.

“For housing, it will be a systematic simmering down process toward more sustainable levels of sales, production and price appreciation as opposed to a full-blown cyclical contraction. In terms of single-family sales and starts, we’ll basically be retracing the increases we saw in 2005, heading back to 2004’s very healthy levels.”

Seiders’ forecast envisions overall housing starts reaching 1.94 million units in 2006, which is down from an estimated 2.06 million units this year and very close to 2004’s 1.95 million units. Single-family starts will decline to 1.59 million next year from this year’s 1.71 million units, while sales of new single-family homes will ease to about 1.19 million units from this year’s record-breaking 1.27 million. Likewise, multifamily starts will slip to 350,000 in 2006 from about 354,000 in 2005. Read More.....Home Forecast
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