• Inventories remain tight at a 5 months’ supply as of September due to negative equity, a declining supply of distressed sales, and a severely depressed level of new construction.
• Expect the U.S. economy to add less than 1 million housing units in 2013 and around 1.15 million in 2014, significantly below normal levels.
• Construction employment is 1 to 2 million jobs below trend levels, which is roughly 1 year of non-farm payroll growth at current levels.
• Expect the ramping up of residential construction to take a while, and while economic growth will improve over the next year, the economy won’t be operating at full potential until sometime after 2015.
For more information visit www.FreddieMac.com.
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