GE Capital: 2013 Housing Starts Strongest Since 2007
In its Q1/14 Construction Industry Research Update, GE Capital said the economy continued to grow in the fourth quarter and recorded a growth of 3.2% in Q4/13 from Q3/13, reflecting positive contributions from exports, nonresidential fixed investment, private inventory investment, and personal consumption expenditures (PCE), that were partly offset by negative contributions from federal government spending and residential fixed investment.
The following highlights were excerpted from the report on home building, housing starts, home prices and mortgage rates:
• While home building activity remained strong in 2013 supported by increasing household formation and lean inventories, we expect this pace to slow in 2014 due to the impact of higher mortgage rates and higher home prices.
• 2013 saw the strongest market for housing starts since 2007, rising +19% year/year. The market was also supported by strong overall existing home sales which rose 9.2% year/year in December, with single family sales rising an even stronger 11.3% year/year.
• Home prices continued to strengthen, rising at an annual rate of 13% in November as measured by the Case-Shiller 20 City Home Price Index. Tight supply is expected to continue to support pricing, albeit at a decelerating rate.
• Mortgage rates continued to increase in 4Q13, with 30 year rates now 100 bps above last year as the impact of the Fed tapering bond purchases began to be felt.
To read the entire report, click here.