Signs Evident For 'Soft Landing'
Among the key statistics released by government agencies and industry-related trade associations in recent weeks were the following:
Existing-home sales, dampened by recent rises in mortgage rates, fell in January, declining 10.7% from their "exceptional" December 1999 pace of 5.14 million units to a seasonally adjusted annual rate of 4.59 million units, the National Association of Realtors reported. According to the Washington, DC-based NAR, the sales slowdown resulted primarily from tight inventories, unfavorable weather conditions and a series of mortgage-rate hikes "that have caused the market to settle into a less hectic pace." On a year-to-year basis, home resales were reported down 10% from January 1999. Despite the decline, the NAR said that the housing market "remains robust."\
Cabinet & Vanity Sales
Sales of kitchen cabinets and bathroom vanities rose once again in February, increasing 12.3% over sales during the same month in 1999, according to the Kitchen Cabinet Manufacturers Association. The Reston, VA-based KCMA said that manufacturers participating in the association's monthly "Trend of Business" survey reported that year-to-date sales for the first two months of 2000 show an increase of 12.5% over January-February of '99, with stock cabinet sales up by 12.6% and sales of custom cabinets up by 12.1%.
Domestic shipments of major home appliances continued their impressive rise in March, gaining 22% over the shipments of March, 1999, the Association of Home Appliance Manufacturers reported. According to AHAM, year-to-date shipments through March were running 14.6% over the same three-month period in '99.
The effects of higher mortgage rates "are starting to be felt in the single-family housing market," the National Association of Home Builders reported last month. The Washington, DC-based NAHB noted that while multi-family housing starts have risen in recent months, single-family production is off as are housing permits, an indicator of future housing-start activity. Single-family housing starts in 2000 are being forecast to decline 4.6% from last year's robust pace, although the full year is expected to represent nothing worse than a "soft landing" for housing, the NAHB said. Housing starts dropped 11.2% in March, the largest monthly decline in six years.