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The National Association of Home Builders is bullish about 2016, at least in terms of the production of single-family homes, predicting a hike in starts of almost 30 percent. After all, the economy is humming along, mortgage rates are low and home prices remain attractive even though they are on the rise. The NAHB also says there is pent-up demand for homes. The NAHB isn't so optimistic about the multifamily market, however, and believes there will be a slight decline in this sector in 2016, compared to 2015. If anything does impede the progress of single-family home building, it would be in the form of a shortage of laborers like carpenters, masons and plumbers to keep the supply chain going. Citing an NAHB survey of its members, 13 percent of builders reported the cost and availability of labor was a significant problem in 2011. Their collective worries jumped to 61 percent in 2014. The NAHB is predicting 719,000 single-family starts in 2015, an 11 percent increase from the previous year. In 2016, the NAHB is forecasting single-family home production will jump another 27 percent to 914,000 units. On the multifamily side, production ran at 354,000 units last year, and starts are expected to rise 9 percent to 387,000 units this year. The NAHB believes multifamily starts will decline a modest 3 percent to 378,000 units in 2016. And there is one other issue that could derail single-family home momentum moving forward. "This recovery is all about jobs," David Crowe, chief economist for the NAHB, said. "If people can get good jobs that pay decent incomes, the housing market will continue to move forward." So far, the nation is doing well in that regard. The NAHB said there are 142 million employed people in the U.S. now. This is well above the previous peak of 138 million in 2008, although most of the jobs held today are in the service sector, an area that has traditionally paid lower wages than other types of work. Another positive is that home equity has nearly doubled since 2011, and it now stands at $12.5 trillion, the NAHB said. "The single biggest asset in most people's portfolio is the home they own," Crowe said. "That's important because the primary purchasers of new homes are the sellers of existing homes. The more 96 Landscape Architect and Specifier News Big Jump in 2016 Home Starts Forecast The National Association of Home Builders has forecast a growth rate of close to 30 percent in the single-family market next year. But the NAHB isn't nearly as upbeat about the multifamily sector. equity they have, the more comfortable they feel about purchasing a new home." Mortgage interest rates are expected to rise over the near-term, averaging 4.5 percent in 2016 and 5.5 percent in 2017, Crowe said. But the NAHB does not believe this will have any bearing on the housing market. "As the economy gets better, job and wage growth should keep pace," Crowe said. "So even though mortgage rates will rise, they will still be low by historical standards and very affordable." Residential remodeling activity is forecast to increase 6.8 percent in 2015 over the previous year, and then rise another 6.1 percent in 2016. "We've gotten to the point in the recovery where we no longer have the problems that came with the housing bust," Robert Denk, senior economist for the NAHB, said. Denk was referring to the market turmoil of a few years ago. "It now is really a matter of housing markets reconnecting to the fundamental drivers, and that is employment," Denk added. "Production has been rebounding in all regions, prices have been moving up and new foreclosures are back to more normal levels." Source: National Association of Home Builders Website link: http://tinyurl.com/oa9uqbr I n f o r m a t i o n R e q u e s t # 5 5 5