In the face of far weaker post-recession economic growth than normal and a discouragingly anemic job market, housing will have to wait until next year and the year after for the gains it needs to dig out of its worst downturn since World War II, according to panelists participating in NAHB’s Construction Forecast Webinar on Oct. 27.
While economists generally have been scaling back their earlier forecasts for housing activity this year, the good news is that the job market should improve sufficiently in 2011 to begin thawing the big freeze in household formations of the past few years and to put consumers in a brighter mood, both of which are prerequisites for boosting housing demand, they said.
Some parts of the country will recover sooner than others, the economists on the panel said, and foreclosures will linger as a problem in many of the largest housing markets. However, supply and demand may be in a healthier balance than suggested by today’s high vacancy rates and even conservative demographic projections suggest that housing production will have a lot of catching up to do in the decade ahead.
One of the markets where NAHB expects stronger performance on 2011 is Greenville. Read our earlier post on the Greenville market by clicking here.