The National Association of Realtors is forecasting single-family housing starts likely will total 1 million in 2020, the highest since 2007. That was the year before the nation’s housing market dissolved in a morass that caused a global financial crisis.
HousingWire reports a housing market stymied by supply shortages will get relief next year from homebuilders. Single-family housing starts averaged 1.1 million annually between 1958, when the total was 1.23 million, to 2007, when it was 1.05 million, according to government data.
While there will be more homes, they most likely will not carry higher transactional prices. “This housing cycle is definitely unique in the sense that it’s been a decade and we’re not back to normal in terms of home building,” said Lawrence Yun, NAR’s chief economist.
Yun predicts the median U.S. price for a new home will drop 4% to $313,500 in 2019 and remain almost flat in 2020, rising just 0.02% to $314,200. Existing home medians will climb 4.3% in 2019 and 3.6% in 2020, the NAR forecast said. While price declines wouldn’t be seen as a positive in the existing-home market, they can be good in the new-home segment if caused by a shift toward building smaller, more affordable houses. Yun said that’s what he thinks is happening.
Click on the image above to read more about single home sales in 2020.