At Lambert Ranch, an Irvine, Calif., housing development where prices start at $1 million, just two of 98 homes are unsold since the project opened in May.

The builder, New Home Co., is opening 14 neighborhoods in California this year for buyers enticed by lowinterest rates amid a scarce supply of homes for sale.

“Everywhere we are, we can see it,” said Larry Webb, chief executive officer of Aliso Viejo, Calif.-based New Home. “Talk about pent-up demand.”

U.S. home sales and prices are poised to rise in 2013, solidifying a recovery that began last year after a half-decadeslump that was the deepest since the Great Depression, according to analysts and economists surveyed by Bloomberg. Record-low mortgage rates and attractive prices, supported by declining unemployment, are attracting buyers as the inventory of distressed homes shrinks. Homebuilders are responding by adding supply, bolsteringeconomic growth.

“Increased new residential construction activity will lead to employment gains, which should translate into higher consumption and modest GDP growth,” said Robert Wetenhall, a homebuilding analyst with RBC Capital Markets LLC in New York. The U.S. budget deal reached this week removes a cloud tothat outlook, he said.

Sales of existing homes will rise about 7.2 percent in 2013 to 4.98 million, the highest since 2007, based on the median estimates of 15 economists and housing analysts surveyed by Bloomberg News. Prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012, ac-cording to the forecasters, who used varying measures of values.

Building is set to jump after the inventory of new homes fell last year to the lowest level in half a century. Housing starts, including single-family and multifamily units, are expected to increase 24 percent to 967,000 in 2013, the most since 2007, according to the median of 17 estimates. Starts will reach an annual pace of 1 million by the end of this year and 1.5 million by the end of 2016, according to a report Friday by Goldman Sachs Group Inc. analysts led by Hui Shan, who said housing will remain a “bright spot” in 2013.

Purchases of new single-family houses will climb 23 percentto 448,000 this year, extending last year’s rebound from a record low 306,000 in 2011, according to estimates of 17 analysts surveyed recently.

“We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand,” said Mark Kiesel, managing director at Pacific Investment Management Co. in Newport Beach, Calif.

Kiesel, who predicted the home-price bubble would burst in 2006, is betting on an extended housing recovery with his investors’ money and his own. In May, six years after selling his last house near the real estate peak, Kiesel bought a Newport Beach home in a sign of his conviction that prices had bottomed.

“Residential investments potentially could grow between 20percent and 30 percent” in 2013, adding as much as 0.75 percent to U.S. gross domestic product growth, he said.

While new-home sales are at about a third of the level they were at the peak in 2005, builders are growing more bullish. The National Association of Home Builders/Wells Fargo Housing market index last month rose to its highest level since April 2006. The gauge, in which a number above 50 indicates more builders view sales conditions as good than poor, reached 47, compared with a low of 8 in January 2009.

The Standard & Poor’s Supercomposite Homebuilding Index jumped 84 percent last year, the best performance since 2003. PulteGroup Inc., the largest U.S. homebuilder by revenue, surged 188 percent for the biggest gain in the entire S&P 500.

Increases in home prices, construction employment and consumer optimism can restart the “virtuous circle,” shifting housing from an economic drag to an economic engine, according to Michael Widner, an analyst with Stifel Nicolaus & Co.

“We see 2013 as the year the housing story progresses from ‘no way’ to consensus, and the GDP and job growth tailwinds being sustainable through 2015,” Widner, based in Baltimore, wrote in a Dec. 19 note.

Business, Pages 23 on 01/05/2013