real estateThe chief economist at recently came out on record stating he expects a strong spring selling season in real estate because of a number of factors. These include an improving labor market, continued increases in new home sales and low mortgage rates. Let’s take a closer look at the predictions from Chief Economist Jonathan Smoke.

As for the labor market, Smoke noted unemployment is near 10-year lows and job creation is perhaps the most important factor with regards to the housing market. He predicts that growth in employment will results in 3 percent increase in home sales this year.

Existing home sales were up 11% percent in January as compared to a year earlier, while new home sales were also up. Smoke also noted the median price of new homes is declining because more builders are offering affordable homes after focusing more on the luxury end of the market in recent years. The pace of sales is growing across the U.S. and that’s expected to continue.

Smoke also expects a busy spring selling season because home prices continue to rise and that should lead to more home buyers coming off the sidelines earlier than normal. With supply expected to remain at low levels and that means there is no sign of slowing price increases.

“This is driving prices higher and encouraging consumers who hope to buy this year to get started as soon as possible,” Smoke said.

All of that is the good news. Smoke also offered some warnings in the report. He noted the stock market underperformed in January and February and that has had a negative impact on consumer confidence. Additionally, real estate sales could be stymied somewhat this spring because of a lack of inventory.