With growth forecasts pegged at around 2% for the year, 2012 marks the third consecutive year of slow growth from the steep declines seen in 2008 and 2009. Growth is expected to pick up some in the second half of the year, but problems in the Euro Zone will likely have a dampening effect on theU.S.recovery. Despite the anemic outlook for growth, the housing market is expected to continue to strengthen as the glut of unsold inventory is slowly absorbed by rising demand.
Home sales and construction began trending upwards in the middle of 2011. Housing sales picked up in April after a couple of weak months that were attributed to the push forward effect of an unusually warm winter. Normally, the season represents the nadir for activity in the market, but there was less of a slowdown than might be expected early in the year which was seen to subtract from the sales in late winter and early spring. Compounding the problem was concern over the rising price of gas.
Now that gas prices have stabilized or declined, the sales pace for the last three months has settled into a better than 4% increase from the figures of last year. Housing starts in April were 8% higher than the average number found over the last 12 months. While multi unit housing is also increasing, the greatest gains have come in single family homes. The growing numbers of new starts indicates increased levels of confidence among the nation’s home builders.