The pace of housing starts will speed up this spring, slow and perhaps reverse course at mid-year, and then re-accelerate next winter and into 2011, the National Association of Home Builders' chief economist forecast today.
David Crowe said the number of combined single and multifamily housing starts will rise from an annual rate of 565,000 in 2009's first quarter to 677,000 this quarter. He forecast starts would climb to 688,000 in the second quarter of 2010, slip to 669,000 in the third quarter, and then rebound to 754,000 in the final three months of 2010.
Starts will keep escalating robustly in 2011, he predicted, climbing from an annual rate of 870,000 in the first quarter of that year to 1.22 million in October through December 2011.
Crowe's numbers, delivered in Las Vegas at the start of the International Builders' Show, are more robust--particularly for single-family homes--in the early part of this year than he had forecast last October. He predicted then that first-quarter 2010 housing starts would total 640,000 vs. 677,000 today. But looking at single-family starts alone, Crowe predicted a 600,000 annual rate during the quarter, up from his old prediction of 530,000. Meanwhile he downgraded his multifamily starts expectations to 77,000 vs. 110,000 previously.
Again looking at single-family starts alone in 2010, Crowe forecast starts rates of 610,000 in the second quarter, 580,000 in the third quarter and 650,000 in the fourth quarter. In essence, he predicted bigger numbers in the first through third quarters than he had last fall, but lower numbers for the fourth quarter of 2010. His 2011 single-family forecasts, which showed a jump in the annual rate from 750,000 in the first quarter to 1,035,000 in the fourth quarter, are pretty much what he forecast before.
Meanwhile, the multifamily side is looking weaker. Last October, Crowe forecast annual rates in that sector of 110,000 to 125,000 per quarter in 2010. Now he's expecting annual rates of 77,000 in the first quarter, 78,000 in the second, 89,000 in the third quarter and 104,000 in this year's final quarter. He also was slighly more pessimistic in 2011, cutting annual rate forecasts by 15,000 starts each quarter to total 120,000 in the first quarter, 135,000 in the second quarter, 160,000 in the third stanza and 185,000 in the fourth quarter.