The encouraging job market, low mortgage rates and in overall robust US economy will propel recovery in the new home market. The US economy is forecast to grow at 2.7 percent in 2016 from 2.1 percent in 2015. The US builders and construction companies are upbeat on sales prospects this year.
David Crowe, Chief Economist at National Association of Home Builders, has predicted that a robust US economy, job market and low mortgage rates should help recovery in new home market. The market for new homes rose 15 percent during the 11 months of 2015.
US News reports that US economy is predicted to witness a growth rate of 2.7 percent for 2016 despite mixed track record of growth in 2015. The US homebuilders are optimistic about sales prospects in 2016 and expecting better than previous years.
Crowe said: "There are a number of positive indicators out there that make me believe, this will be a good year for the economy and for housing. Not only is housing finally driving some of that, housing is finally moving at a much faster pace than the economy."
National Association of Home Builders' housing market index is moving steadily at 60 for January 2016. The index above 50 indicates positive tone in the single-family housing market. The index is showing a modest growth in the new home market.
Economists in a survey carried out by The Wall Street Journal (WSJ) forecast that a reading of 62 in January. The index fell to 61 for December 2015. It was at 62 for November marginally off from a 10-year high of 65 in October. HFE economist Jim O'Sullivan said: "While the level is down from the recent high, it is still showing a gain over the past year."
Now, all eyes on US shale oil production levels. Whether US sustain the current level of production or lower it owing to continuous drop in oil prices. US GDP growth rate is predicted to go up at 2.4 percent in 2016 from 2.1 percent in 2015. The GDP growth rate is forecast to slowdown to 2.2 percent in 2017.
The US economic outlook is healthy as the GDP growth rate is forecast to be in the range of 2--3 percent. There's no too much inflation or deflation. The decline in gasoline prices helped increase in more savings for the US consumers. The drop in oil price has also lowered cost of transportation, food and raw materials for businesses, as reported by About News.
The sales for single-family homes were up at eight-year high in November 2015, while new home sales grew 15 percent. These positive factors have contributed to the hiring in the construction sector. The US construction sector added 215,000 jobs in 2015 indicating a 3.4 percent growth rate.
However, home sales and construction activity yet to rebound fully from the housing bust about a decade ago. The new home sales will depend up on the pace of recover in the US economy. However, the returns on pre-housing boom sales will only realize in a couple of years.
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