There will be two distinct phases of homebuilding on the East Coast in the coming decades, leading to a housing market rebound, according to a recent report from TD Economics, an affiliate of TD Bank.

A broad cyclical rebound will take place over the next five to seven years and a longer-term trend driven by population growth will also occur, leading to vastly different patterns of housing construction in the Northeast, according to the report’s author, TD Economist Alistair Bentley.

"Almost every state along the East Coast will enjoy a burst of construction activity at some point over the next five to seven years, as homebuilding catches up with fundamentals," Bentley said. "Changing demographics will lead to different trends in housing construction beyond the medium term, however, as population growth is slated to slow."

After this initial rebound, demand in the Northeast is poised to slow in the long run, owed to an aging population and weak migration trends, according to a statement. Over time, homebuilding activity in the region will start to diverge from that of the South where housing starts will be driven by demand for new housing units.

"Homebuilding will become more centered on replacing and improving the existing stock of housing in the Northeast," Bentley said.