1998 Momentum Helping New Year
The positive momentum generated by a robust 1998 will probably carry over well into 1999, although the growth rate of key kitchen and bath industry barometers is facing an inevitable slowdown, according to housing and industry-related analysts. While 1999 should be another favorable year, analysts say, such key market forces as housing starts and home sales are expected to weaken from their torrid '98 pace, dampening kitchen and bath product shipments - even as those shipments remain at historically high levels.
Among the industry's key statistical-related developments in recent weeks were the following:
1999 will witness a slowdown in existing-home sales from the "amazing" record pace of last year, but sales this year will "remain stronger" than those of any year on record outside of 1998, the National Association of Realtors reported. According to the Washington, DC-based NAR, last year's record sales pace of more than 5.0 million existing homes will slow down over the next couple of years, along with overall U.S. economic growth. "However, don't fret too much; consumers will have affordability on their side, given the favorable outlook on mortgage rates," commented the NAR, which is forecasting gradually falling mortgage rates.
The fundamentals behind buyer demand continue to be "very strong," as high consumer confidence and low interest rates continue to fuel new-home sales, the National Association of Home Builders reported. The Washington, DC-based NAHB reported that the record level of new-home sales posted in 1998 has helped push the nation's homeownership rate to an all-time high of 66.8%. Though the NAHB - which forecasts a 7% decline - expects the market to slow down, it "still expects 1999 to be the second best year on record" for new-home sales. The NAHB pointed to several factors leading it to conclude that while 1999 should have a "solid" beginning, a "moderate slowdown" will extend into the year 2000. Factors include potential stock market reversals, a credit tightening, the global economic slowdown and a job growth slowdown.
Domestic shipments of major home appliances reached record numbers in 1998, posting record numbers for most product categories, noted the Chicago-based Association of Home Appliance Manufacturers.The AHAM reported that a total of 56.6 million appliances were shipped in 1998, up 10.2% over 1997. Among the kitchen product categories exhibiting the sharpest year-to-year gains were gas surface cooking units (+20.1%), electric surface cooking units (+13.3%), refrigerators (+10.7%), free-standing electric ranges (+9.6%), disposers (+6.9%) and dishwashers (+6.6%), the AHAM added.
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