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The kitchen and bath industry continues to feel the downturn in the nation’s housing market, although signs show the residential remodeling sector continues to exhibit residual strength and even modest growth. Among the statistics and forecasts released by government agencies, research firms and industry-related trade associations in recent weeks were the following:

Housing Starts

The current pattern of housing starts and building permits clearly demonstrates “that the dramatic downward correction in housing production still is underway,” the chief economist for the National Association of Home Builders said last month.

Commenting on the recent steep drop in building permits – considered a key indicator of future housing construction activity – David Seiders noted that builders are cutting back on new construction and intensifying their efforts to bolster sales and limit cancellations as a result of a continued lag in home-buyer demand. Housing starts through April were down 16.1% from a year earlier, the NAHB added.

Exisitng-Home Sales

Existing-home sales are expected to move in a relatively narrow range, with a gradual upturn becoming more pronounced by year’s end, according to the latest forecast by the National Association of Realtors. Lawrence Yun, senior economist at the Washington, DC-based NAR, said last month that while overall housing levels “are historically strong,” sales of existing homes “remain sluggish” compared to the recent boom. “Home sales will likely fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by year’s end,” Yun said, adding that many markets are expected to see higher sales and strengthening prices during the second half of 2007. Existing-home sales are projected to total 6.18 million units in 2007 and 6.41 million units in 2008 – down from the record 6.48 million resales in 2006.

Kitchen & Bath Remodeling

Residential construction may be off in 2007 as the housing slump continues, but kitchen and bath remodeling is expected to post a modest increase, according to a newly released market analysis by the National Kitchen & Bath Association. According to the Hackettstown, NJ-based NKBA, there were 7.4 million kitchens remodeled last year, along with approximately 10.3 million baths. The NKBA said it expects a “cautiously optimistic” remodeling forecast of 7.55 million kitchen jobs this year, up 1.5% over 2006, with bath jobs rising 1.6%, to 10.48 million units. In contrast, the NKBA expects kitchen-and-bath-related declines in new construction, as that market sector continues to slump.

Cabinety & Vanity Sales

Kitchen cabinet and bathroom vanity sales declined again in April – the product of a continued downturn in the nation’s housing market – the Reston, VA-based Kitchen Cabinet Manufacturers Association said last month (see related story, boxed at right). According to the KCMA, manufacturers participating in the association’s monthly “Trend of Business” survey reported that overall cabinet sales decreased 11.4% in April compared to April, 2006. Sales of stock cabinets fell 23.6% for the month, while semi-custom cabinet sales declined 4.0% and custom cabinet sales posted an increase of 22.2 %. Year-to-date sales through the first four months of 2007 were down 13.9% from the same time period of 2006.

The Continued Downturn In the Nation’s Housing Market

Market Analysis:

Analyst Forecasts a Mixed Bag For U.S. Kitchen Cabinet Market

Lake Tahoe, CA - When it comes to the nation’s cabinet market, the current picture is a mixed bag of both positive and negative factors.

That’s the view of economic analyst Wayne Wilbanks, who last month addressed attendees at the 52nd Annual Convention of the Kitchen Cabinet Manufacturers Association in Lake Tahoe, CA.