Market Continues '02 Growth Path

Market Continues '02 Growth Path

The housing industry and the related kitchen/bath market are continuing to defy the odds in 2002, significantly outperforming the overall U.S. economy while spurring economic growth, according to the latest indicators, which reveal strength in home sales and shipments of major products. Among the key statistics released by government agencies and industry-related trade associations in recent weeks were the following:

U.S. residential remodeling expenditures are expected to reach a record 164.9 billion in 2002, and are being forecast to rise an average of 3.4% annually through 2011, according to the latest forecast issued by the National Association of Home Builders. The Washington, DC-based NAHB projected in August that expenditures for improvements and maintenance on owner-occupied and rented U.S. homes would reach $170.2 billion next year, and nearly $220 billion by 2011. Most of the money to be spent by homeowners will be for improvements, which includes additions and alterations encompassing kitchen and bath remodeling and replacements, the NAHB noted (see graphs, above right).

Sales of existing single-family homes sold in 2002, which demonstrated a rare dip in June, are now "at more sustainable levels," and are still expected to post an annual record this year, the National Association of Realtors said last month. The Washington, DC-based NAR said that the June decline in resales was "expected," coming off record levels of existing-home sales in the first half of 2002. However, "continued favorable mortgage rates and an expanding economy will keep the housing sector from faltering," said NAR senior forecast economist Lawrence Yun.

Domestic shipments of major home appliances fell slightly in August, declining 3.2% over August
of 2001, the Association of Home Appliance Manufacturers said last month. The Washington, DC-based AHAM reported that 4.9 million appliances were shipped in August, down from the 5 million units shipped in the same month a year earlier. Year-to-date domestic shipments of home appliances from January through August were running 7.1% over shipments from the same eight-month period in 2001, AHAM said.

Sales of kitchen cabinets and bathroom vanities increased 10.8% over July 2001, the Kitchen Cabinet Manufacturers Association said last month. The Reston, VA-based KCMA noted that the association's monthly "Trend of Business" survey reported that stock cabinet sales were up 5.8% in July, while semi-custom sales rose 35.4%. Custom cabinet sales posted a 9.8% decline, the KCMA said. Year-to-date sales from January through July were up 11.4% over the same period a year earlier, the KCMA added.