Remodeling Poised for Growth
With home sales picking up and contractors seeing more positive business conditions in the future, remodeling activity in the U.S. is in a position to see accelerated growth by the end of this year and into 2013, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, Cambridge, Mass. The LIRA suggests annual homeowner improvement spending may reach double-digit growth by the first quarter of 2013.
“Warm weather in the first quarter temporarily bumped up remodeling activity in many areas,” says Eric S. Belsky, managing director of the Joint Center. “By the end of the year, however, positive market fundamentals are expected to kick in, moving the industry out of this ebb and flow period and into a new growth phase.”
“Home improvement activity has been bouncing around the bottom of this cycle for almost three years now, waiting for the industry to get some traction,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “Now, the combination of low financing costs, stronger consumer confidence, improving home sales and the perception that home prices have stabilized in most markets across the country are encouraging owners to start working on the list of home-improvement projects they have been putting off. ”
Prices Gain, Sales Fall for Existing Homes
Existing-home prices continued to show gains but sales fell in June with tight supplies of affordable homes limiting first-time buyers, according to the National Association of Realtors, Washington, D.C. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 5.4 percent to a seasonally adjusted annual rate of 4.37 million in June from an upwardly revised 4.62 million in May but are 4.5 percent higher than the 4.18 million-unit level in June 2011. The national median existing-home price for all housing types was $189,400 in June, up 7.9 percent from a year ago. This marks four back-to-back monthly price increases from a year earlier, which last occurred in February to May of 2006.
84 Metros Listed As Improving
The list of U.S. housing markets showing measurable and sustained improvement rose by four to include 84 metros in July, according to the Washington, D.C.-based National Association of Home Builders/First American Improving Markets Index. This number includes representatives from 32 states plus the District of Columbia.
Housing Starts Rise 6.9 Percent
Nationwide housing production rose by 6.9 percent to a seasonally adjusted annual rate of 760,000 units in June, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, both based in Washington, D.C. This is the fastest pace of new-home construction since October of 2008.
Builder Confidence Rises in July
Builder confidence in the market for newly built, single-family homes rose six points to 35 on the Washington, D.C.-based National Association of Home Builders/Wells Fargo Housing Market Index for July. This is the largest one-month gain recorded by the index in nearly a decade and brings the HMI to its highest point since March 2007.
Boomers Evenly Distributed Geographically
A recent analysis of government data by the National Association of Home Builders, Washington, D.C., reveals the geographic distribution of households headed by someone age 55 or older is fairly even across most of the country, with more than 30 percent of all households in every state meeting this description. The data show 43.9 million households are headed by someone 55 years old or higher, accounting for nearly 38 percent of all U.S. households. Among the 50 states and the District of Columbia, the share of households ranges from 31 to 45 percent. West Virginia tops all states with 45 percent of its households headed by someone 55 or older, followed by Florida at 44 percent, Hawaii and Maine at 43 percent each, and Pennsylvania and Montana at 42 percent each. At the other end of the scale, Utah and Alaska are the only states where less than one-third of the households are headed by someone aged 55 or older.