Activity in the nation’s booming housing industry should hold up at fairly robust levels into 2005, according to the consensus of economists participating in the National Association of Home Builders’ Construction Forecast Conference at the National Housing Center in Washington, D.C. The conference, held twice yearly, brings together top experts from across the housing industry to discuss topical issues.
Panelists were largely optimistic about prospects for the residential construction industry, economic growth, job growth and inflation as the Federal Reserve continues to gradually push up interest rates and the fiscal stimulus of the Bush Administration’s tax cuts begins to fade.
High oil prices were identified as the wildcard in the scenario. While hard to predict, energy costs were expected to subside next year from today’s record levels after taking a small bite out of economic output and consumer confidence in the short term.
“The housing market has been nothing short of phenomenal, especially anything that smacks of home ownership,” said NAHB Chief Economist David Seiders. But the nation’s housing market is in the process of “reaching its limits” and “topping out.”
With activity “flattening in 2005,” Seiders is forecasting a decline in housing starts next year of about 4.2 percent to 1.85 million units, down from the 1.935 million starts projected for this year. Sales of new single-family homes are forecast to drop 5.2 percent from a record of more than 1.16 million this year to about 1.1 million.
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