2021 Market Solid Despite Price Gains
The market for both new construction and residential remodeling remains solid, even in the face of sharply rising home-related prices and supply-chain challenges, market analysts report. Among the key statistics and forecasts released in recent weeks by government agencies, research firms and industry-
related trade associations were the following:
Growth in improvement and repair expenditures to owner-occupied homes is expected to remain “solid” throughout 2021 and into 2022, according to the Leading Indicator of Remodeling Activity, compiled by the Joint Center for Housing Studies of Harvard University. The latest LIRA forecasts a “healthy pace” of gains in annual home renovation and repair spending this year. “With a financial boost from federal stimulus payments and strong house-price appreciation, homeowners are continuing to invest in the upkeep and improvement of their homes,” said Chris Herbert, managing director of the Cambridge, MA-based Joint Center. Although the recent surge in do-it-yourself remodeling activity is slackening, “homeowners are undertaking larger discretionary renovations that had been deferred during the pandemic,” observed Joint Center Economist Abbe Will. “A shift to more professional projects should boost annual homeowner remodeling expenditures to $370 billion by early next year.”
HOUSING STARTS & NEW-HOME SALES
Housing production remains steady, builder confidence remains strong and buyer demand remains solid due largely to low mortgage rates and limited inventory in the resale market. However, rising costs for building materials continue to impede positive momentum in the market, the National Association of Home Builders reported. Overall housing starts, according to the latest available government figures, were pegged at a seasonally adjusted annual rate of 1.74 million units, the fastest pace for combined single- and multi-family construction since mid-2006. When comparing the first quarter of 2021 to the first quarter of 2020, single-family starts were up 19.6%, while multi-family starts increased 30.8%, the NAHB reported. “(But) despite strong buyer traffic, builders continue to face challenges,” said NAHB Chairman Chuck Fowke. “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances and other building materials,” Fowke added.
CABINET & VANITY SALES
Major U.S. kitchen cabinet and vanity manufacturers continued to post early-2021 sales gains, according to the latest in a series of “Trend of Business Surveys” conducted by the Kitchen Cabinet Manufacturers Association. The KCMA’s latest survey results, released in May, reflected a 17.9% rise in overall sales among participating cabinet manufacturers for March, compared to the same month in 2020. March custom cabinet sales were up 21.5%, while semi-custom sales rose 20.3% and stock sales gained 29.6%, according to the Reston, VA-based trade association. Sales through the first quarter of 2021 were up 11.6% over the same three-month period last year, the KCMA added.
A three-month surge saw domestic shipments of major home appliances post sharp gains in the first quarter of 2021, the Association of Home Appliance Manufacturers reported. According to the Washington, DC-based AHAM, first-quarter appliance shipments increased 27.4% over those in the first three months of 2020. First-quarter 2021 gains were posted in all key product categories, including cooking appliances (+25.2%), kitchen cleanup (+15.0%), food preservation (+41.6%) and home laundry (+28.9%), the trade association added.