Fitch Ratings paints rosy picture of 2014 economy
NEW YORK – Jan. 22, 2014 – Although U.S. home sales are currently lackluster, a stronger economy and better employment numbers should likely counter higher interest rates and more restrained price increases in 2014, according to Fitch Ratings’ Report: U.S. Homebuilding/Construction: The Chalk Line (Winter 2013-2014).
Fitch expects a continued, moderate cyclical improvement in overall construction activity during the year, but with the potential for a few upgrades, according to Managing Director Robert Curran.
“”Housing metrics should increase in 2014 due to faster economic and job growth, despite somewhat higher interest rates, as well as more measured home price inflation,” says Curran.
Fitch forecasts that:
• Single-family starts will improve 20 percent to 746,000 in 2014 as multifamily volume grows about 9 percent to 328,000 for total starts topping one million.
• New home sales will advance about 20 percent to 518,000 while existing home volume increases 2 percent to 5.16 million.
• New home price inflation should moderate in 2014, partially because of higher interest rates. Average and median new home prices should rise about 3.5 percent in 2014.