While some experts voiced concerns regarding speculative investment activity in a few of the nation's frothiest housing markets - including California, Las Vegas, South Florida, Washington, DC and the New York-Boston corridor - by and large, they expect to see a slowdown in the rate of price appreciation in most parts of the country rather than an actual decline in house prices.
How aggressively the Fed pushes up interest rates will depend on the inflation picture, and although inflation has now moved to the upward range of what the Fed finds acceptable, prices remain well under control, the economists said. And, barring unexpected run-ups in energy prices, the overall outlook appears quite favorable, they added.
Estimating annual housing demand at 2 million units over the next decade, Jim Glassman, managing director and senior policy strategist with J.P. Morgan Chase, said that recent productivity gains bode well for housing because they have bolstered corporate profits, which in turn should lead to increasing wages and significant improvement of the standard of living for many Americans.
Industry Stocks Ride Market Up
Performance of key publicly traded industry companies.
Stocks associated with the kitchen and bath industry rose again in May, as substantial economic gains trumped volatile oil prices to lift Wall Street markets higher.
The index of 55 key stocks of building products manufacturers, distributors, retailers, home builders and e-commerce enterprises - as tracked in Kitchen & Bath Design News’ exclusive monthly Stock Index - gained 66.88 points, or 2.60%, to close the trading period from May 5 through June 3 at 2638.31. Similarly, the Dow Jones Industrial Average advanced 120.57 points, or 1.17%, ending the month-long trading period at 10460.97, while the Nasdaq Composite Index increased 109.63 points, or 5.58%, to close at 2071.43 (see Market Diary, below).
Advancing stocks outpaced declining issues 40-14, with nine of the stocks hitting a new 52-week high and three falling to a new annual low.
Top gainers for the period included Maytag Corp., Armstrong World Industries and Toll Bros. Domtar, Owens Corning and Du Pont were among the biggest losers.
Editor's Note: Several of the companies listed in KBDN’s monthly Stock Index are parent companies of–-or have key financial ties to–building and remodeling industry product suppliers. Included are the following: Armstrong World Industries (Triangle Pacific, Bruce Hardwood, Hartco Flooring); Black & Decker (Price Pfister, Kwikset, DeWalt); DR Horton (Schuler Homes); Electrolux AB (Frigidaire Co.); Fortune Brands (Moen, MasterBrand Cabinets - Aristokraft, Decorá, Diamond, Kemper, Omega Cabinetry and Schrock); Griffon Corp. (CLOPAY); Illinois Tool (Wilsonart International, Florida Tile); IAC/InterActiveCorp (ServiceMagic, Inc.); International Paper (Nevamar); Knape & Vogt (Feeny Mfg.); Masco Corp. (Merillat Industries, KraftMaid, Delta Faucet, Peerless Faucets, Aqua Glass/Huppe, Melard Mfg., Zenith Products and Baldwin Hardware); Maytag Co. (Jenn-Air and Magic Chef); Mohawk Industries (Dal-Tile); Newell Rubbermaid (Amerock); OfficeMax; Pentair (Porter-Cable); Technical Olympic USA (Engle Holdings Corp. and other home-building companies.); Tomkins (LASCO Bathware and Pegler Ltd.); U.S. Industries (Jacuzzi Brands, Inc.); Weyco Group (Willamette Industries); and Whirlpool Corp. (KitchenAid and Roper).