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Study Shows Improving Projections for Single-Family Housing

The ""Urban Land Institute (ULI)"":www.uli.org/ has released a new study that shows declining expectations for the U.S. economic picture, with one positive exception - single-family housing. In the organization's semi-annual Real Estate Consensus Forecast, ULI found that most growth projections had been scaled back, while the residential market was marked by improving predictions versus data recorded six months prior.

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Conducted by ULI's Center for Capital Markets and Real Estate, the group's report examined growth expectations for the nation's economy, real estate capital markets, and commercial real estate fundamentals. Polling 39 leading real estate economists and analysts from around the U.S., ULI's statistics indicated ""more optimism"" in the single-family housing industry, and forecasts for starts and home prices demonstrated significant increases.

Predictions for single-family housing starts rose by 30,000 over figures recorded by ULI in March, with respondents calling for an estimated 530,000 starts to end 2012.

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Looking at long-term data, those surveyed by ULI project that starts will reach 675,000 in 2013 and 800,000 by 2014.

The nation's home prices are also expected to head upward, and ULI's findings showed that economists anticipate a 3.2 percent uptick in pricing by the end of the year. Projections for home prices over the next two years also bested ULI's March statistics, and poll participants are calling for a 3.9 percent rise in pricing for 2013, with a 5 percent rise in 2014.

""The forecast suggests that a housing recovery is underway, as consumers sense a tipping point, and, drawn by low mortgage rates, return to the market,"" ULI noted in an official statement.

Meanwhile, the commercial sector didn't fare as well in the report, with expectations for growth activity dropping by as much as 20 percent from numbers recorded in March. Transaction volume is estimated to slide to $223 billion, falling below last year's $277 billion. However, ULI's data did indicate a slight rise in commercial mortgage-backed securities, which are expected to reach $35 billion in 2012.

Commenting on the institute's study, Dean Schwanke, executive director of ULI's Center for Capital Markets and Real Estate, said that ""continued uncertainty over Europe's debt crisis, the outcome of the presidential and congressional elections in the U.S., and the complexities of tighter financial regulations"" appear to be keeping economic growth at a slow pace.

""What this survey suggests is that, in general, the U.S. economy is making progress inch by inch. Nothing indicates a quick turnaround, but the economy and the real estate industry are moving toward a notable improvement by 2014,"" Schwanke concluded.

About Author: Jason Myers

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