Market, Despite Challenges, on Upswing
The housing and residential remodeling markets continue to post gradual, palpable growth, even in the face of affordability and other structural challenges, industry analysts said last month. Among the key statistics and forecasts released in recent weeks by government agencies, research firms and industry-related trade associations were the following:
HOUSING STARTS & BUILDER CONFIDENCE
Solid gains in housing starts are in line with surveys reflecting a spike in confidence, even as builders wrestle with affordability concerns and other challenges, the National Association of Home Builders said last month. Housing starts, according to the latest figures, were at their highest level since May 2007, while permits – a harbinger of future production – were running at a 1.42-million-unit annualized rate, the NAHB said. Builder confidence in the market also rose, matching its highest level since last October. “Housing has been on an upswing since spring,” said Robert Dietz, chief economist for the Washington, DC-based NAHB. Dietz warned, however, that builders “are expressing growing concerns regarding uncertainty stemming from the trade dispute with China,” at the same time as a manufacturing slowdown is stifling construction in some areas.
Homeowners are exhibiting a sharp rise in demand for dedicated home-automation systems, according to the latest in a series of surveys conducted by the American Institute of Architects. The survey also revealed that demand for outdoor living spaces, mud rooms, home offices and au pair/in-law suites continues to remain strong, topping the list of special-function rooms popular for both new and remodeled homes. Among the high-tech features in demand are energy management systems, electric car docking stations, solar panels, wireless sound systems, home-automation controls and security systems, according to the AIA. Demand is also strong for first-floor master bedrooms, wider doorways and hallways, easy-to-use features and multiple laundry rooms (see graph, above; related Consumer Buying Trends).
Existing-home sales have inched up in recent months, but inventory remains low and that is fueling price increases, the National Association of Realtors said last month. Overall sales, pacing at a seasonally adjusted annual rate of 5.49 million units, are up 2.6% from a year ago, but home builders “need to ramp up new housing, as the failure to increase construction will put home prices in danger of increasing at a faster pace than income,” said Lawrence Yun, chief economist for the Washington, DC-based NAR, which reported that the median existing-home price for all housing types is up 4.7% from the same time a year ago. Year-over-year price gains have been reported for 90 consecutive months, the NAR added.
Domestic shipments of major home appliances posted a modest gain in August compared to the same month in 2018, although year-to-date shipments continue to lag those of a year ago, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that August appliance shipments totaled 5.67 million units, up 1.6% from the 5.58 million units shipped in August 2018. Year-to-date shipments through August were nevertheless down 4.7% from the same eight-month period a year ago, AHAM said.