Forecasts Favorable For Key
HOUSING STARTS & HOME SALES
PLUMBING PRODUCTS SHIPMENTS
CABINET & VANITY SALES
Despite "sinking consumer confidence" fueled by a dwindling stock market, threats of war and continuing disclosures of corporate fraud, "real estate investments are performing well and homeowners understand the continued value of kitchen and bath remodeling," according to Dick Titus, executive director of the Kitchen Cabinet Manufacturers Association. Titus made his comments last month, after the Reston, VA-based KCMA reported that sales of kitchen cabinets and bathroom vanities were up 11.4 percent in the second quarter of 2002 compared to the same three-month period in 2001, with stock cabinet sales up 13% and custom cabinet sales up 4% for the quarter.
Mortgage Rate 'Honeymoon' Seen Coming to End, Realtors Assert
Washington, DC Mortgage rates may be at their lowest level in decades, but that's not a situation that will last forever, a leading economist for the National Association of Realtors predicted last month.\
And, if the nation's housing market is to remain healthy and stable, other economic factors aside from mortgage rates alone will have to prevail, the NAR economist pointed out.
The average rate on a 30-year mortgage edged below 6% in late September for the first time since the 1960s, continuing to stimulate record levels of home sales and unleashing the greatest torrent of home refinancing ever.
However, Lawrence Yun, senior forecast economist for the Washington, DC-based NAR, said that the association's forecast for interest rates is "upward" based on projected steady economic expansion, higher corporate profits, and an eventual move by the Federal Reserve to curb inflation by hiking short-term rates.
Yun cautioned, moreover, that since current mortgage rates "have very little room to move downward," the next major impetus to housing demand must come from two byproducts of an improving economy: job creation that results from business spending, coupled with a rise in consumer confidence.
Yun noted, as evidence, the fact that home price appreciation is easily outrunning income growth a misalignment that can cut into future housing affordability conditions.
"Economic growth is coming at a critical point for housing," Yun observed. "The magical influence of low mortgage rates can no longer be counted on alone to keep housing activity at its current record-setting levels. A solid economic growth from this point onward is vital in keeping housing demand alive."
The NAR is projecting 2003 new- and existing home sales to remain at about their current, high levels. The trade association also said it sees continued "attractive" mortgage rates although slightly rising keeping the housing market "at a sustainable pace."