More housing expected in 2016

Crediting a strengthening economy, a rise in jobs, an increase in consumer confidence, more household formations and home demand, the National Association of Home Builders (NAHB) predicts a good year for housing in 2016.

And while mortgage rates are expected to rise slightly in 2016, they should still be affordable.

“There are a number of positive indicators that provide solid evidence this will be a good year for housing and the economy,” said NAHB Chief Economist David Crowe.

According to the report, jobs in the private sector have grown an average of 240,000 per month over the past two years. Construction jobs have also increased, adding 215,000 jobs in 2015, up 3.4 percent from 2014.

NAHB predicts 1.26 million total housing starts in 2016, an increase of 13.4 percent from a projected 1.11 million starts in 2015.

Builders have reported their top concerns for this year are the cost and availability of developed lots and labor, federal environmental regulations and policies that are making it more expensive and difficult to build homes, and building materials prices, according to the report.

Increasing 18 percent from last year’s projected housing, single-family home production is expected to reach 840,000 units in 2016. As the housing market continues to recover, NAHB predicts single-family starts will continue to increase from 55 percent of normal production at the end of the third quarter of 2015, eventually up to 87 percent of normal by the end of 2017.

As for multifamily starts, NAHB is forecasting an increase of 5 percent from last year, from 397,000 to 417,000.

Residential remodeling is also expected to increase in 2016. NAHB is expecting a 1.1 percent gain over last year.