The chart on the right explains GS assumptions of a 2.8% GDP growth in 2015. The main driver is a 6.8% growth in residential investment, in the right side of the chart. Currently Q1 is showing a 4.8% decline, YoY, in existing sales, the Q3 2014 levels. And new home sales dropped 11% in March. But that drop was from a previous high.
This is annual rate of housing permits, seasonally adjusted. Can GS get a 6.8% jump in these numbers? The market has levelled off. Where are the new buyers going to come from? Job growth has leveled off, and we have a low growth Q1. New buyers need at least one quarter to become a bit more confident, so that puts all the growth back into summer home season.
I do not think so.
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