In 2012 housing market conditions have been improving, says a new report from IBIS World on "The Real State of Residential Real Estate."
Housing starts are estimated to decline at an average rate of 11.8 percent per year in the five years to 2012, while total residential construction spending drops at an average annual rate of 9.8 percent. However, the pool of potential buyers is increasing as the labor market recovers, with the national unemployment rate expected to improve slightly to 8.5 percent in 2012 from 9 percent in 2011. Low prices and interest rates are making homes more affordable, too. The report says rising home sales are bringing down inventory and helping to create more balanced conditions in certain regions, although a low inventory of homes is increasing competition and frustrating potential home buyers in some areas.
Meanwhile, increased demand for rental housing is fueling investment in multifamily construction, which is expected to continue growing in 2013 and 2014. The apartment and condominium construction industry is forecast to grow 18.4 percent to about $27.6 billion in 2012. This industry, comprised of firms that construct multifamily homes, is currently experiencing a boom in demand as multifamily home construction emerges as one of the strongest real estate sectors in the wake of the recession.
These improving housing market conditions will fuel growth for the wood panel manufacturing industry, which is expected to increase by 9.6 percent in 2012. In the five years to 2017, industry revenue is forecast to grow at an annualized rate of 9.8 percent to nearly $26.7 billion. As demand for wood paneling products increases, manufacturers will drive up demand for timber services to manage the forest lands where this key input is grown.
The full report can be read at http://clients.ibisworld.com/mediacenter/pdf.aspx?file=Real+State+of+Residential+Real+Estate.pdf.
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