The dollar volume of U.S. home sales will rise modestly next year, but that growth will stem entirely from increased home prices, per National Association of Realtors Chief Economist Lawrence Yun. Tight underwriting by lenders, low inventories in many markets and rising interest rates will hold back growth in sales volume, says Yun.
Home sales are predicted to be about 5.12 million for 2014 - virtually the same level forecoast for this year. But home prices will rise 6%.
According to Yun, the U.S. needs to spur stonger growth in the housing market by increasing inventory through stepped-up new construction - and only more new homes will ease tight intories and help slow home price gains. Last year only about 900,000 homes were started, a 50-year low and half the amount that's needed.
Tom: Much of the same national analysis by Dr Yun holds true for our local SW Florida market. We need more new construction to increase inventory, slow price escalations, and to spur the local ecomony and employment.