Despite housing inventory and labor shortages, the housing market will continue to move in an upward trend in 2016, according to the National Association for Home Builders.
The market is increasing thanks to high employment and home equity.
Total U.S. employment is currently at 142 million people, higher than the previous peak of 138 million that occurred in 2008. Home equity has almost doubled since 2011 and is now at $12.5 trillion.
"The single biggest asset in most people's portfolio is the home they own," said NAHB Chief Economist David Crowe in a statement. "That's important because the primary purchasers of new homes are the sellers of existing homes. The more equity they have, the more comfortable they feel about purchasing a new home."
Mortgage rates are expected to increase soon, but they will not have an impact on the housing recovery, Crowe said.
"As the economy gets better, job and wage growth should keep pace,” he said. “So even though mortgage rates will rise, they will still be low by historical standards and very affordable."
The NAHB is projecting 719,000 single-family home starts in 2015, up 11 percent from 647,000 units last year. In 2016, single-family home production is expected to increase an additional 27 percent to 914,000 units.
