5 THINGS THAT WILL HELP NEW-HOME SALES THIS YEAR
Sales of newly built homes in the U.S. endured a rocky 2013, ultimately amounting to roughly half their historical annual rate after being whipsawed by rising interest rates, the fitful economic recovery and buyers cowed by high prices.
Economists widely expect this year to deliver better results for home builders and buyers alike, as long as several factors such as job growth, credit availability and consumer confidence continue to improve. The National Association of Home Builders expects 2014 new-home sales to tally roughly 600,000, a heady increase of roughly 40% from the 2013 total.
Estimates released Monday by the U.S. Census Bureau shows that new-home sales totaled 428,000 in 2013, up 16.4% from the 2012 figure of 368,000. Last year’s increase was the third consecutive annual gain after a steep decline from nearly 1.3 million in 2005 to a nadir of 306,000 in 2011.
Here’s a look at five things that economists expect will boost the new-home market in 2014.
1. YOUR NEIGHBOR GETS A JOB, YOU BUY A HOUSE
Newly hired workers don’t often rush out to buy a house. However, more tenured workers often are more likely to buy a house if continued hiring by their employers indicates their jobs are secure.
The U.S. labor market added jobs at an average monthly rate of 182,000 in 2013, according to the U.S. Bureau of Labor Statistics. Economists surveyed by The Wall Street Journal expect that rate to increase to roughly 200,000 per month this year as companies gain more confidence and spend more freely.
David Crowe, chief economist at the National Association of Home Builders, anticipates that the increased hiring will unleash pent-up demand from would-be buyers who were too uncomfortable to buy in recent years. “For home buying, employment growth has more to do with providing comfort to those who have a job,” Mr. Crowe said.
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