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...nonresidential construction is expected to increase by almost seven percent in 2007 in inflation adjusted terms, analysts predict.
Home Sales Remain High
In early January, Federal Reserve Governor Susan Schmidt Bies said: "The slowdown in the growth of real GDP since last spring [2006] largely reflects cooling of the housing market: sales of both new and existing homes dropped sharply after their peak in the summer of 2005, the inventory of unsold homes has soared, and the number of single-family and multifamily housing starts has fallen nearly 30 percent since the beginning of last year. At the same time, homes are appreciating more slowly and in some markets prices are even declining."
Total housing starts for 2006 were estimated at 1.801 million units, down 13 percent from the 2.068 million housing starts reported in 2005, according to the Commerce Department. The National Association of Home Builders reported that single-family permits for December 2006 were 29.1 percent below a year earlier. The National Association of Realtors reported that existing home sales eased but prices stabilized as inventories tightened in December.
Homes sales remain historically high, says David Lereah, NAR's chief economist. "Despite all of the doom-and-gloom stories and dire predictions over the last year, 2006 was the third strongest year on record for existing home sales," he said. "It looks like we're moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices."
The national median existing home price...
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