Meanwhile, households across the nation have been increasing their savings and shedding debt. “They’ve corrected a lot of excesses and feel more comfortable about moving forward,” Crowe said, noting that the University of Michigan Consumer Sentiment Index shows that the percentage of consumers who believe that now is a good time to buy a house is back up to levels last seen near the housing boom.
However, Crowe cited several headwinds that are impeding the recovery.
“Credit conditions are much tighter now, builders are increasingly facing labor shortages, lot supplies are tight, building material prices are rising, and inaccurate appraisals are hurting home sales” he said.
“You can’t charge more than you can get an appraisal for,” Crowe added. “Even though we are seeing price increases in labor, land and materials, 36 percent of builder recently said they had lost at least one sale over appraisals coming in below the cost of production.”
A Solid Outlook
NAHB is forecasting 924,000 total housing starts in 2013, up 18 percent from 783,000 units last year.?Single-family production is expected to rise 17 percent this year to 629,000 units, jump an additional 31 percent next year to 826,000 and surpass the 1 million mark in 2015.