Consumers who put off home buying during the downturn are poised to enter the market thanks to stronger job growth, loosening bank lending and more stable household finances.
Provided rates remain low and home prices don’t increase too rapidly, this is good news for mortgage professionals
, said Marc Savitt, president of the National Association of Independent Housing Professionals (NAIHP).
There were 2.3 million fewer households last year than there should have been based on population growth, according to economist Maury Harris in a USA Today report. He expects those deferred households to take off in the next few years, increasing household formation by 465,000 annually.
Already, residential investment contributed to economic growth for the eighth consecutive quarter, adding 0.3 percentage points during the first quarter of 2013. And a surge in multifamily housing allowed the annualized pace of total housing starts in March to surpass the one million market for the first time since the housing crisis.
In the next five years, the switch from pent-up demand to catch-up consumption will boost annual consumer spending growth by a percentage point, the economist estimates.