Housing Continues With Strong Showing
The nation's housing market, coming off a record year in 2003, continues to exhibit resilience and strength with shipments of key products, including those for the kitchen and bath, following suit in 2004. Among the key statistics released by government agencies, research firms and industry-related trade associations in recent weeks were the following:
HOUSING STARTS & SALES
Demand for newly built single-family homes "held steady at a healthy level" in March, according to builders surveyed for the National Association of Home Builders' most recent Housing Market Index (HMI). Unusually cold and wet weather in the South and West helped cool the national pace of new-home construction for February, the NAHB noted. Housing starts slipped to the seasonably adjusted annual rate of 1.855 million units. Even so, the pace of starts remained well above the 2003 annual total of 1.848 million, which was the highest in 26 years, the trade association added.
NEW & EXISTING-HOME SALES
The nation's housing market "could defy expectations" in 2004 and set another record for existing-home sales this year, the chief economist for the National Association of Realtors said last month. According to David Lereah, the Washington, DC-based NAR is projecting that resales will decline slightly this year. "But they remain at exceptionally high levels [and] with a strong underlying demand for housing from a growing population in a recovering economy, we could be flirting with another record this year," Lereah said. Existing-home sales are projected at 5.92 million this year, second only to the 6.10 million posted in 2003. Sales of existing single-family homes rose in February, marking only the eighth month on record that the sales pace has reached or exceeded the 6 million mark, the NAR reported. The pace of new single-family home sales increased 5.8% over the month before, to a seasonally adjusted annual rate of 1.163 million, the Commerce Dept. reported. This was a 24.4% gain over the February 2003 pace and 7.2% above the average for all of last year.
Domestic shipments of major home appliances rose slightly in February compared to February of 2003, the Association of Home Appliance Manufacturers reported. The Washington, DC-based trade association said that shipments in February totaled 6.03 million units, up 1.3% over shipments in the same month last year. Year-to-date shipments through February, pegged at 11.3 million units, were up 4.9% over the same two-month period in 2003, AHAM noted. The association also released a revised forecast for 2004 and 2005, projecting advances in appliance shipments, to record levels, for both years (see graph, above right). A previous forecast called for a slight decline in 2004, off the record 73.7 million appliances that were shipped last year. The revised forecast calls for more than 75.5 million units to be shipped in 2005, up from the 73.9 million units projected for this year.
CABINET & VANITY SALES
Sales of kitchen cabinets and bathroom vanities increased 17.6% in February over sales the same month a year earlier, 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 year-to-date sales for the first two months of 2004 were running 17.8% over sales in January-February of 2003.
Industry Stocks Slide Amid Concerns
Stocks associated with the kitchen and bath industry declined in March. The index of 56 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 fell 47.84 points, or 2.01%, to close the trading period from March 5 through April 5 at 2330.01. In similar fashion, the Dow Jones Industrial Average dropped 37.10 points, or 0.35%, ending the month-long trading period at 10558.40, while the Nasdaq Composite gained 31.49 points, or 1.54%, to close at 2079.12 (see Market Diary, below).
Declining stocks edged out advancing issues 30-24. Twenty-two of the stocks rose to a new 52-week high, while one fell to a new annual low and two remained unchanged. KMart, Stanley Works and Owens Corning were top gainers, while Wickes and Beazer Homes were among the session's top losers.