Housing Reported Off to Solid '03 Start

Housing Reported Off to Solid '03 Start

The remarkable 2002 performance posted by the nation's housing market is apparently continuing in 2003 according to the first industry-related barometers generated for this year. Among the key statistics released by government agencies, research firms and industry-related trade associations in recent weeks were the following:

HOUSING STARTS/HOME SALES
The nation's home builders remained "solidly optimistic" about conditions in the single-family housing marketplace in February, the National Association of Home Builders reported last month. The Washington DC-based NAHB said that its monthly Housing Market Index (HMI) was down two points, to a still-healthy 62 reading in February. The HMI has remained within the same relatively high three-point range since September of 2002, the trade association pointed out (see graph at right). Builders began work on new homes and apartments at a seasonally adjusted annual rate of 1.85 million units in January, according to Commerce Dept. figures. In addition, Commerce Dept. figures released last month revealed that more newly built homes were sold in 2002 than in any other year in history, with December of 2002 posting the strongest sales pace for any month on record. Total new-home sales for 2002 reached 976,000, up 7.5% from the previous annual record of 908,000 units, set in 2001. For the month of December 2002 alone, new-home sales hit a seasonally adjusted annual rate of 1.08 million units, up 3.5% from the previous month.

EXISTING-HOME SALES
Total existing-home sales, which include single-family, apartment condominium and co-operative sales, rose in 45 states and the District of Columbia in the fourth quarter of 2002 compared with the same period in 2001, the National Association of Realtors reported last month. In addition, fourth-quarter sales were up 5.8% from a pace of 6.19 million units recorded in the third quarter of 2002, and were the second-highest level on record, according to the Washington, DC-based NAR. Association president Cathy Whatley observed that both demographics and economics are at play in the strong sales performance (see related story, boxed below). Regionally, the West reported the strongest annual increase for the fourth quarter, up 14.8% from the fourth quarter of 2001. In the Midwest, total existing-home sales were up 9.2% over those in the fourth quarter of 2001. The Northeast was up 6.8%, and the South gained 5.1%, the NAR reported.

CABINET & VANITY SALES
Sales of kitchen cabinets and bathroom vanities increased 8.2% in January compared to the same month a year earlier, the Kitchen Cabinet Manufacturers Association said last month. The Reston, VA-based KCMA noted that manufacturers participating in the association's monthly "Trend of Business" survey reported that January declines in sales of stock cabinets (-1.3%) and custom cabinets (-5.1%) were more than offset by sales of semi-custom cabinets, which rose 34.4%.

APPLIANCE SHIPMENTS
Domestic shipments of major home appliances started 2003 down 3.3% from the pace set in January of 2002, although a new annual shipment record is still projected to be set this year, the Association of Home Appliance Manufacturers reported last month. According to the Washington, DC-based AHAM, appliance shipments totaled 3.66 million units in January, off from the 3.78 million units shipped the same month a year earlier. The declines were most pronounced in the categories of food preservation (down 12.4%), home laundry (down 7.5%), and kitchen clean-up (down 6.7%). Despite the January decline, AHAM is projecting a total of some 69.3 million appliances to be shipped in 2003, compared to shipments of about 67.9 million units last year.

K&BDN Index Slumps, as Activity Weakens
Perhaps unable to sustain the breakneck level of activity posted in recent months, the kitchen and bath industry is seemingly pausing to catch its breath, according to an exclusive monthly Index developed by Kitchen & Bath Design News.