Page 26 - FEB18_BUILDERBRIEF

Economic Panel

Predicts Housing

Will Gain

Ground in 2018

The newly enacted tax law will create a more
favorable tax climate for the business community,
which should spur job and economic growth
and keep single-family housing production on
a gradual upward trajectory in 2018, according
to economists who spoke at the International THE FORECAST
Builders’ Show in Orlando.
“We expect that tax reform will boost GDP
growth to 2.6% in 2018, and this added economic
activity will also bode well for housing, although As the economy continues to strenghten,
there will be some transition effects in high-tax NAHB Projects:
jurisdictions,” said NAHB Chief Economist Robert » 30-year fixed-rate mortgages will average
Dietz. “Ongoing job creation, expected wage 4.31% in 2018 and 4.82% in 2019.
increases and tight existing home inventory will
also boost the housing market in the year ahead.” » 1.21 million total housing starts in 2018 and
overall production to grow an additional
However, builders will continue to deal with 2.7% to 1.25 million units.
ongoing supply-side headwinds this year
that will dampen more robust growth. These » Single-family starts to rise 5% in 2018 to
factors include an increasing number of unfilled 893,000 units and increase an additional
construction jobs, a shortage of buildable lots 5% to 940,000 next year.
and a slow growth in acquisition, development
and construction loan activity that is failing to Setting the 2000-2003 period as a benchmark
keep pace with rising demand. for normal single-family housing activity when
In addition, regulatory costs stemming from single-family production averaged 1.3 million
building codes, land use, environmental and units annually, single-family starts are expected
other rules have jumped 29% in the past five years, to gradually rise from 63% of what is considered
significantly impacting housing affordability. The a typical market in the third quarter of 2017 to 73%
ongoing U.S.-Canada softwood lumber trade of normal by the fourth quarter of 2019.
dispute is further exacerbating the situation, as On the multifamily side, NAHB is expecting
the price of softwood lumber has increased 20% multifamily starts to edge 1.6% lower this year to
from a year ago. 354,000 units. This is a sustainable level due to
26 FEBRUARY 2018 | GREATER SAN ANTONIO BUILDERS ASSOCIATION