The U.S. record-setting economic expansion will continue at least through 2021, according to a survey by Urban Land Institute.
GDP will grow 2.3% this year, 1.7% next year and 1.9% in 2021, according to the average forecast of 41 economists and analysts at 32 top real estate companies. The report called the U.S.-China trade war a “headwind” that will dampen U.S. economic activity without causing a contraction.
“Contributing economists see no end” to the economic expansion that began in 2010, said William Maher, director of Americas Strategy and Research at LaSalle Investment Management. “Economic growth, including GDP and job growth, is forecast to moderate from the strong levels of 2018, which should keep long-term interest rates low.”
Net job growth should average 1.7 million per year through 2021, compared to a long-term average of 1.1 million, the report said. The national unemployment rate likely will remain at its current level of 3.7% in 2019, the lowest rate of the past 50 years, but edge up to 4.1% by 2021, ULI said.
“The sentiment of the group remained generally upbeat despite the inverted yield curve for U.S. Treasury bonds (often a harbinger of a recession), an escalation of the U.S.-China trade dispute, and slowing economic growth in Europe, particularly in the United Kingdom and Germany,” the report said.
Home prices probably will grow at an annual average pace of 3.2% for the next three years, the report said. The single-family construction market will worsen, it said. Starts probably will fall from 877,000 in 2018 to 850,000 this year, ULI said. The downward arc will continue next year with 810,000 starts, followed by 800,000 in 2021.
“The single-family housing construction outlook weakened over the past six months, as higher construction costs may be slowing demand,” the report said. “Expected construction in all years is below the long-term annual average of 975,000 homes, and would mark the first decline in deliveries since the global financial crisis.”
