After five years of strong house price growth, the U.S. housing market remains strong. Demand is strengthening, and residential construction activity is rising.
According to Standard and Poor’s, there was a 5.83% rise in the S&P/Case-Shillerseasonally-adjusted national home price index during 2016 (3.71% in real terms). This came after y-o-y rises of 5.27% in 2015, 4.52% in 2014, 10.74% in 2013, and 6.47% in 2012.
According to Standard and Poor’s, all 20 major U.S. cities experienced relatively strong house price hikes, with Seattle posting the highest increase of 10.75% during 2016. It was followed by Portland (10.01%), Denver (8.89%), Tampa (8.33%), Dallas (8.06%), Miami (6.79%), Boston (6.31%), Detroit (6.27%), and Atlanta (6.21%).
According to the Federal Housing Finance Agency (FHFA), the Mountain region had the highest house price increases of 8% during 2016, followed by the Pacific region (7.4%), South Atlantic (6.9%), Central region (6.2%), and the West South Central region (6.1%).
According to the U.S. Census Bureau, the average sales price of new homes sold in the U.S. rose by almost 12% during the year to February 2017, to US$390,400.
According to the U.S. Census Bureau, demand has been shooting up. Sales of new single-family houses rose by 12% to 561,000 units in 2016 from the previous year. Likewise, existing home sales were up by 3.8% to 5.45 million units in 2016, the highest level since 2006, according to the National Association of Realtors (NAR).
Construction activity continues to rise strongly. In February 2017, new housing starts rose by 6.2% y-o-y to a seasonally-adjusted annual rate of 1,288,000 units. Building permits (private) rose by 4.4% y-o-y to a seasonally-adjusted annual rate of 1,213,000 units in February 2017.
The U.S. housing market is expected to remain strong. NAR projects about 4% increase in the national median existing-home price this year. In addition, sales are forecast to grow by around 2% to 5.46 million this year and by another 4% to 5.68 million in 2018.
According to the U.S. Bureau of Economic Analysis, the U.S. economy grew by 1.6% in 2016, down from 2.6% growth in 2015 and the lowest level since 2011. The economic deceleration was mainly due to the slowdown in private consumption, private inventory investment, fixed investment, and government spending. According to the IMF, the world’s largest economy is expected to grow by 2.2% this year, and by 2.1% in 2018.