After a solid first quarter for the housing market, along with the most recent housing data that mostly topped expectations, economists expect the housing market to lead the way in the US economy’s rebound in the second quarter. This article from Business Insider highlights all the housing and economic data that is confirming economists’ outlook for a healthy 2015.
Many economists are convinced that the housing market is the strongest it’s been in years. Moreover, economists think this will be the catalyst that powers the economy going forward.
In a note last month, Morgan Stanley economists including Vishwanath Tirupattur wrote: “Despite a weak first quarter on several fronts of the US economy, the housing sector has been a source of relative strength. In our view, the US housing sector is poised to accelerate into the spring, a traditionally strong period for housing.”
And in a note on Wednesday, the same team wrote, “May was arguably the most positive month for housing data in quite some time, and Monday’s construction spending print was the cherry on top.”
Existing home sales are picking up steam, 6.6% higher for the first three months of this year than the first quarter of 2014. Morgan Stanley notes that all regions of the country have seen growth. New home sales have seen “impressive gains,” outpacing growth over the past two years.
Home prices have risen in the first half of the year. Combining the indexes that measure prices, Morgan Stanley estimates growth of between 4.1% and 6.8%.
Starts and permits are just slightly higher for the quarter compared to the same period last year (+3.9%). However, the index of building permits, a combination of the tally of permits for new construction and renovations, is up 8%.
