Bill McBride has pulled in some optimistic comments from Michelle Meyer at Merrill Lynch. Meyer says 2012 will “go down in history as a year of transition for the housing market” with housing starts on track to be up 25 percent and home prices on track to increase 5 percent by year’s end.
Meyer forecasts housing starts to increase another 25 percent in 2013 to 975,000, and home prices to increase another 3 percent.
“The housing market is turning into an engine of growth once again. Housing construction will likely add 0.3pp to GDP growth in 2012 and 0.4pp to 2013 growth,” Meyer said. “… The gain in homebuilding will support related sectors such as furniture, building material sales and financial companies. Moreover, construction jobs will finally come back, allowing some of the 2 million people who lost construction jobs to find employment in the field again.”
Meyer says we are “on the verge of construction hiring,” noting that historically, construction hiring lags output by a year. She sees contractors feeling more comfortable with hiring in 2013 is demand continues to grow. Meanwhile, she believes many construction professionals will find work in renovations, which are also on the rebound.