Housing helps keep recovery going
Housing starts and permits for January 2016 will be reported by the Commerce Department on Wednesday.
With all the weakness and uncertainty that have emerged in the U.S. economy in recent months — in manufacturing, exports, energy and financial markets — the residential construction sector has grown steadily and not faltered. In 2015, building permits were up 12 percent and housing starts were up 6.4 percent.
Christopher Mayer at the Columbia University Business School said it has gotten easier for people with steady jobs and income to qualify for mortgages. That is helping young first-time homebuyers and anyone who lost their home and has now repaired their credit.
“Credit is modestly loosening,” Mayer said. “And before people panic,” he added, “we’re not talking about 2007 standards,” referring to the overly loose mortgage-lending standards that helped precipitate the housing bubble and subsequent financial crisis.
Economist Robert Dietz at the National Association of Home Builders predicts a 15 percent rise in single-family home construction in 2016, a pace that he expects will overtake multifamily apartment construction, which had been the leading sector coming out of the recession.
Dietz said builders around the country remain generally optimistic, even as they begin to face production constraints caused in part by the pickup in market demand for new home construction.
“There are a number of supply-side headwinds," Dietz said, "what we’ve been calling 'the three Ls’: lots, labor and lending.' "