|GDP||2% growth for the year, down from 2.4% in '15 More »|
|Jobs||195,000 new hires a month through '16 More »|
|Interest rates||10-year T-notes at 2.1% by end '16 More »|
|Inflation||2.4% for '16, up from 0.7% in '15 More »|
|Business spending||4% gain in '16, after drop in '15 More »|
|Energy||Crude oil trading at $40-$45/bbl. by July 4 More »|
|Housing||Construction of single-family homes up 15% this year More »|
|Retail sales||4.2% growth in '16, from 4.7% in '15 (excluding gasoline sales) More »|
|Trade deficit||Widening 4% in '16, after a 6.2% increase in '15 More »|
Trends in residential construction remain positive, despite the recent decline in housing starts. Owing to a warmer-than-usual early winter, spring groundbreaking for new-home construction was pushed forward to the first two months of the year, which is largely why total housing starts dropped 8.8% in March from February. Note, though, that starts are still up compared with March 2015, indicating that the pace of construction remains healthy.
See Also: All Our Economic Outlooks
The housing market is gaining momentum as the spring selling season revs up. Sales of existing homes surged 5.1% in March to an annual rate of 5.33 million units. Moreover, sales rose in all regions of the country, jumping as high as 11.1% in the Northeast and 9.8% in the Midwest. Realtors are seeing higher foot traffic from buyers, especially in the West and the South. Favorable mortgage rates plus job and wage gains will continue to propel home sales this year.
Home inventories remain relatively tight, even with the 5.9% rise in inventory of existing homes in March. Buyers are moving quickly to snap up homes for sale. In March, houses typically stayed on the market for 47 days — down from 59 days in February. Builders ramping up single-family construction in coming months, combined with a growing number of people listing existing homes for sale, should help ease some of the supply constraints.
Home prices are appreciating at a moderate pace, on average. Home value appreciation was unchanged in February from the previous month. The S&P/Case-Shiller U.S. National Home Price Index rose 5.3% in February from a year earlier. Cities such as Portland (Oregon), Seattle and San Francisco are seeing home prices rise at a double-digit pace. These metro areas are more likely to start seeing affordability becoming an issue for some folks, particularly those looking for starter homes.