Sustained Strength Seen for Housing
With an exceptional 2003 now firmly in the record books, and
underlying conditions remaining positive, housing, remodeling and
kitchen/bath industry officials are pointing toward 2004 as another
strong year. Among the key statistics released by government
agencies, research firms and industry-related trade associations in
recent weeks were the following:
Home builders completed “an extraordinary year” in 2003 and “remain
upbeat about the strength of the market for the year ahead,”
according to Kent Conine, president of the National Association of
Home Builders. The Washington DC-based NAHB announced that new home
construction for 2003 totaled 1.848 million units, the highest in
25 years and a healthy 8.4% above the number of housing starts for
2002. “The strength in housing in 2003 was concentrated in
single-family unit starts, while condominium units in multi-family
structures gained ground as the year progressed,” observed NAHB
chief economist David Seiders. He noted, “Interest rates are now
lower than expected, and the rates may move up less than
[originally] projected in the months ahead, so 2004 could even
surpass the excellent performance of 2003.”
The nation’s housing market “continues to offer surprises,”
including a resumed decline in mortgage interest rates. That was
the assessment last month of National Association of Realtors’
chief economist David Lereah. There were a total of 6.1 million
existing-home sales last year, up 9.6% from the previous record of
5.566 million in 2002, according to the Washington DC-based NAR.
Lereah said the trade association has been expecting the pace of
home sales to ease, “but the latest figures show there’s still a
lot of life in this market,” he said.
NAR President Walt McDonald noted that favorable housing
affordability conditions will continue, and that “given the demand
from a growing number of households, we can expect sales to remain
close to record activity this year.”
Domestic shipments of major home appliances rose to record levels
in 2003, gaining 8.5% over the previous record set a year earlier,
the Association of Home Appliance Manufacturers reported last
month. Shipments for 2003 totaled 73.7 million units, compared to
the previous record of 67.9 million units in 2002, AHAM noted. The
Washington, DC-based trade association reported gains for the year
in the key product categories of cooking equipment (+6.4%), home
laundry (+5.8%), kitchen cleanup (+5.7%) and food preservation
CABINET & VANITY SALES
Sales of kitchen cabinets and bathroom vanities in 2003, aided by a
sharp rise in December, rose 13.1% over sales in 2002, according to
the Kitchen Cabinet Manufacturers Association. The Reston, VA-based
KCMA noted that manufacturers participating in the association’s
monthly “Trend of Business” survey reported sales of $6.1 billion
for 2003. “Low interest rates and strong consumer demand for new
homes, combined with a strong kitchen and bath remodeling market,
has fueled 93 consecutive months of growth,” said KCMA executive
v.p. Dick Titus.
U.S. Countertop Demand Forecast to Increase Steadily
Cleveland, OH U.S. demand for residential kitchen and bath
countertops is forecast to increase more than 2% annually as a
“reflection of kitchen and bath remodeling expenditures that are
expected to improve” through 2007, a leading industrial market
research firm said last month.
According to the Cleveland, OH-based firm The Freedonia Group,
kitchen and bath countertop demand will be fueled in part by a
continued trend toward larger kitchens and more bathrooms in both
new and remodeled homes. However, projected declines in new
single-family housing starts will limit more robust gains through
These and other countertop trends are contained in a new study
released by The Freedonia Group. The study forecasts a total
countertop market of 467 million sq. ft. by 2007, up from 420
million sq. ft. in 2002.
Advances in countertop demand will be stimulated by growth in
the remodeling segment, which accounted for 71% of sales volume in
2002, according to The Freedonia Group.
“This is partly because kitchen and bathroom improvements are
among the more popular home remodeling projects, and countertops
are a key aspect of many of these remodeling projects,” The
Freedonia Group observed.
Laminate countertops will continue to account for the largest
share of countertop shipments, with nearly 60% or 277 million sq.
ft. of the total market by 2007, the research firm predicted.
However, significantly stronger year-to-year gains will be
experienced by natural stone, with the demand for stone “aided by
consumer interest in the luxury and style that most stones offer,”
The Freedonia Group said.