Results continue to be generally favorable throughout the housing and related kitchen/bath markets, even as affordability issues continue to lead to a gradual cooling of what has been a super-hot market. Among the key statistics released by government agencies, research firms and industry-related trade associations in recent weeks were the following:
Housing market fundamentals suggest that the sharp spike in home construction reported in January “will be hard to sustain,” and the latest survey of home builders points to some “cooling down in coming months, largely because of eroding affordability conditions,” the National Association of Home Builders reported. The Washington, DC-based NAHB made its comments after a temporary sag in interest rates and the warmest January on record nationwide combined to result in a 14.5% surge in new home construction for the month. The January pace of new-home construction rose to a seasonally adjusted annual rate of 2.276 million units, the highest on record since 1973. However, the January surge in housing starts “was mainly weather-related,” said NAHB Chief Economist David Seiders. The NAHB’s latest forecast for 2006 is projecting a 6.5% decline in housing starts, to an estimated 1.93 million units.
Existing-home sales this year, already slowing, are expected to remain below the peak levels in 2005, “but will remain historically strong,” the National Association of Realtors said last month. Existing-home sales are likely to decline 4.7%, to 6.74 million, this year, down from a record 7.07 million units in 2005. NAR President Thomas M. Stevens said the long-term outlook for home prices and sales is favorable. “Echo-boomers are just entering the period in which people typically buy their first home. Along with a strong immigrant impact, and the boomers themselves who remain in peak earnings years, the need for housing will stay strong over the next decade,” Stevens commented.
Domestic shipments of major home appliances increased 3.6% in January over the same month a year ago, the Association of Home Appliance Manufacturers reported. According to the Washington, DC-based AHAM, January appliance shipments totaled 4.97 million units, up 3.6% from the 4.80 million units shipped in January, 2005. Shipments of food preservation products and laundry products, for example, gained 13.2% and 10.5%, respectively; in contrast, shipments of kitchen clean-up products declined 7.6%, while cooking product shipments fell 2.5%, the association noted.
Cabinet & Vanity Sales
Following on the heels of a 13+% gain last year, sales of kitchen cabinets and bathroom vanities rose 11.3% in January over sales in January 2005, the Kitchen Cabinet Manufacturers Association said last month. According to the Reston, VA-based KCMA, manufacturers participating in the association’s monthly “Trend of Business” survey reported that sales of stock cabinets rose 11.7% for the month, while semi-custom cabinet sales were up 10.6% and custom cabinet sales increased 13.2%.
Home Improvement Called Strong, Despite Modest Housing Market Slowdown
Tampa, FL — Mortgage rates may be on the rise, and the housing market cooling, but the home improvement industry remains strong, the latest statistics reveal.
Total home improvement product sales in 2005 reached a new annual record of $291 billion, up 7.5% from a year earlier, according to estimates by the Tampa, FL-based Home Improvement Research Institute (HIRI), a nonprofit organization of more than 70 manufacturers, retailers, wholesalers and allied organizations in the home improvement industry.
Due in significant part to continued hurricane rebuilding activity, 2006 sales are expected to increase an additional 4.6%, to $305 billion, HIRI said (see related graph, above right).
According to HIRI, housing starts and existing-home sales – strong coincident indicators for home improvement activity – stayed at a high level throughout 2005, as have sales to do-it-yourself consumers.