Housing starts probably will reach a three-year high of 739,000 in 2011, creating enough jobs to shave half a percentage point off the unemployment Rate, said David Crowe, chief economist of the National Association of Home Builders in Washington.
“This is an ugly economic cycle,” he said in a telephone interview. “We need job creation to get people comfortable with buying a home. If they do that, we’ll create jobs that will reinforce that home buying and fuel additional job growth.” More building in 2011 will add almost 500,000 jobs, he said. The homebuilders’ association expects an unemployment rate of 9.1 percent by the end of 2011.
Momentum in 2012
A bottom in the housing market would improve the prospects of companies in the Standard and Poor’s Midcap Homebuilding Index, which has declined 68 percent since its peak in July 2005. Douglas Yearley, the chief of index-member Toll Brothers Inc., said in a Dec. 8 interview at Bloomberg’s New York headquarters that the worst is over for housing.
“The recovery is here to stay,” said Yearley, whose company, based in Horsham, Pennsylvania, is the largest U.S. luxury-home builder. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”