2013 ECONOMIC OUTLOOK
Steady Market Gains Ahead
By Robert Freedman
Modest growth in the economy and an improving
job picture bode well for both residential and
For residential practitioners, NAR’s forecast for 2013 looks like a return to normalcy,
with healthy price appreciation, an increase in both existing- and new-home sales, and
a drying up of the shadow inventory. Interest rates are expected to remain low, though
inflation could put upward pressure on both rates and home prices.
For commercial practitioners, the rise in renter households is good news for the
multifamily sector. O;ce, industrial, and retail are all expected to inch back, with
slight declines in vacancies and positive growth in net absorption and rents.
WHERE WE’VE BEEN
Own vs. Rent The number of owner households has been flat over the past several years.
Despite U.S. population growth of roughly 1 percent
per year, the number of owner households has held
2004 2005 2006 2007 2008 2009 2010 2011 2012 2004 2005 2006 2007 2008 2009 2010 2011 2012
steady, in the range of 75 million since 2007, while the
number of renter households has
increased from 35 million in 2007 to nearly 40 million
today. Some renters who’d like to take advantage of
today’s favorable prices and interest rates are finding
credit standards too tight to obtain financing. NAR
warns that continued tight credit
conditions threaten to widen the wealth gap
between owners and renters.