Eco-friendly Product Consideration to See Little Change
In a survey conducted by the Research Institute for Cooking and Kitchen Intelligence, 35 percent of designers indicate clients will give less consideration to the use of eco-friendly products in kitchen remodels throughout the next 12 months. Ten percent believe clients will give more consideration, while the majority, 54 percent, believe clients will give eco-friendly products the same level of consideration as they have in the past.
The survey is part of the institute’s Kitchen and Bath Remodeling Trends study, which was conducted in 2012 among 280 kitchen and bath designers and dealers.
Remodeling Gains to Continue into 2014
General strengthening in the housing market over the past 18 months is translating into increased spending on home improvements, 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. Remodeling contractors have been reporting improving market conditions for the past four quarters, and are seeing strength in future market indicators. Spending trends have been on a solid upward slope, with the Leading Indicator of Remodeling Activity (LIRA) projecting continued strengthening of the market through the end of this year and into the first quarter of 2014.
“Homeowners are more comfortable investing in their homes right now,” says Eric S. Belsky, managing director of the Joint Center. “Consumer confidence scores are back to pre-recession levels, and since recent homebuyers are traditionally the most active in the home improvement market, the growth in sales of existing homes is providing more opportunities for these improvement projects.”
“Yet, with housing starts leveling off in the second quarter and financing costs beginning to edge up, we may be seeing the beginning of more measured growth in the residential markets,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “Given normal timing patterns, this suggests that the pace of growth for home improvement spending should begin to moderate as we move into 2014.” The next LIRA release date is Oct. 17.
Strongest Spring Home Selling Season Since 2004
Home value appreciation spread and accelerated in the second quarter after a relatively slow start to the year, according to the second quarter Zillow Real Estate Market Reports. The U.S. Zillow Home Value Index rose to $161,100 as of the end of the second quarter, up 5.8 percent year-over-year and 2.4 percent from the first quarter, the largest annual gain since August 2006 and largest quarterly gain since the fourth quarter of 2005.
National home values rose just 0.25 percent during the first quarter. The 2.4 percent quarterly rise in the second quarter was the sixth straight quarter of appreciation and represents the largest second quarter gain since 2004. Home values are expected to rise another 5 percent throughout the next 12 months, according to the Zillow Home Value Forecast. For more information, visit Zillow.com/research.
U.S. Residential Sales Up
The U.S. Residential Sales Report from RealtyTrac shows that U.S. residential property sales reached an estimated annualized pace of 5.3 million in June 2013. This pace is up 2 percent from the previous month and up 8 percent from a year ago.
“The U.S. housing market is slowly but surely moving toward a more normalized and sustainable pattern after a flurry of institutional and cash buyers flocked to residential real estate last year, pushing up prices and picking clean the best inventory available in many area,” said Daren Blomquist, vice president at RealtyTrac. “Rising home values should continue to unlock more non-distressed inventory while also pricing institutional investors out of more markets, which, combined with rising interest rates, will cool off the pace of price appreciation.” For more information, visit Realtrytrac.com
Remodeler Confidence Rebounds
Confidence in the remodeling market rebounded in the second quarter of 2013 with the Remodeling Market Index rising six points to 55, according to the National Association of Home Builders. The rise in existing home sales and increased demand for remodeling projects contributed to the positive report.
An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.
“Remodelers are feeling optimistic about the home improvement market during what has turned out to be an uneven recovery,” said NAHB Remodelers Chairman Bill Shaw, GMR, GMB, CGP, a remodeler from Houston. “The RMI future market results are especially promising. Not only do remodelers have projects booked for the next few months, but they also have more work coming in the door.”
The future market indicators component of the RMI increased to 56 from the previous quarter level of 48. Current market conditions rose from 50 in the previous quarter to 54. All of the indicators of future activity (i.e. calls for bids, work committed for three months, backlog, and appointments) were over 50 for the first time in eight years.
Rising Home Values Affect Affordability
Nationwide housing affordability slipped several notches as recovering markets witnessed significant firming of home prices in the second quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
In all, 69.3 percent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $64,400. This is down from the 73.7 percent of homes sold that were affordable to median-income earners in the first quarter, and the first time that the measure has fallen below 70 percent since late 2008.
In 2012, wind energy became the number one source of new U.S. electricity generation capacity for the first time, representing 43 percent of all new electric additions and accounting for $25 billion in U.S. investment . Source: Energy Department
U.S. house price appreciation continued in May 2013, rising 0.7 percent on a seasonally adjusted basis from the previous month. Source: Federal Housing Finance Agency
Three in five homebuyers say school district boundaries will affect their home-purchasing decision. More than 44 percent will go over budget by up to 10 percent to live in a highly rated district. Source: Bankrate.com
Almost one-third of homeowner improvement spending is for projects where there is likely to be an improvement in energy efficiency, such as window replacements, adding insulation and upgrading the HVAC system. Source: Joint Center for Housing Studies