Barclays: ‘Turning point’ for homeowners in 2013

Falling housing inventories and an increase in demand bode well for the market’s recovery next year, according to Barclays 2013 housing outlook report.

Real estate wealth is expected to give a long-awaited boost to consumer spending in 2013.

“This would mark an important turning point for household balance sheets, where net-wealth effects from falling financial prices and the collapse of the housing market have been significant impediments to the strength of consumer spending and, in turn, the pace of the broader recovery,” Barclays reported.

Meanwhile, housing starts are projected to reach 944,000 in the first quarter of the new year and then rise to 973,000 by the second quarter, according to the report. Also, housing inventories are expected to increase modestly through the year.

“New-home inventories have fallen to their lowest levels ever, as home builders have held housing starts below even the depressed pace of new-home sales in recent years,” according to the report. “Now that new- and existing-home sales are on sustained upward trends, new-home inventories have fallen enough that builders need to raise housing starts to prevent inventories from falling further.”