Market on Upswing as 2020 Winds Down
Low interest rates are among the factors spurring growth in homebuilding and residential remodeling as 2020 concludes amidst ongoing challenges wrought by COVID-19. 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 & NEW-HOME SALES
Low interest rates, solid demand and a shift in home building to the suburbs are spurring growth in the construction of single-family homes, although home builders continue to face concerns with respect to rising lumber prices and supply chain shortages of other building materials, the National Association of Home Builders said. Builder confidence in the market for newly built single-family homes hit an all-time high in recent weeks, according to the latest NAHB/Wells Fargo Housing Market Index. At the same time, sales of newly built, single-family homes reached their highest pace since September 2006. “Surging sales are consistent with record builder confidence levels stemming from higher buyer traffic, historically low interest rates and a shift in demand for lower-density markets,” said NAHB Chairman Chuck Fowke. “New home sales are now 15% higher on a year-to-date basis, but with inventory at just a 3.3 months’ supply, more construction is needed,” added NAHB Chief Economist Robert Dietz. “The challenge,” Dietz said, “will be whether materials and labor are available.”
Further gains in existing-home sales are “likely” for the balance of 2020, with continued job recovery and mortgage rates hovering around 3%, the National Association of Realtors is forecasting. According to Lawrence Yun, chief economist for the Washington, DC-based NAR, the “need for housing will grow further,” especially in areas that are attractive to buyers who can work from home. “Remote work opportunities are likely to become a growing part of the nation’s workforce culture,” Yun said, adding that “this reality will endure even after a coronavirus vaccine is available.”
Residential design professionals working on outdoor spaces have been among those seeing the greatest recent increase in demand by homeowners, according to Houzz Inc., the Palo Alto, CA-based online platform for home remodeling and design. Houzz, which reported a sharp mid-year rise in leads for residential design projects, said that design pros working on outdoor spaces, landscaping pools and spas, and decks and patios saw project leads more than double in recent months. Kitchen and bath remodelers also experienced a significant increase in demand compared with 2019, Houzz reported. “Insights on the types of projects homeowners pursued speaks to a need for more usable space both inside and outside of the home,” Houzz said. “Homeowners are also seeking more privacy and security.”
Pandemic Seen Increasing Likelihood of Kitchen, Bath Redesigns
NEWPORT NEWS, VA — The COVID-19 pandemic is apparently having a significant impact on the mindset of American homeowners when it comes to the likelihood of redesigning their bathrooms and kitchens, according to the findings of a major new survey.
The survey, conducted recently by Ferguson Bath, Kitchen & Lighting Gallery, found that almost half (47%) of surveyed U.S. homeowners say that they would like to redesign their bathroom and 44% said they’d like to redesign their kitchen based on their experience during COVID-19. In contrast, only 12% said they are not planning to do any redesigns or upgrades to those spaces at this time, the survey revealed.
“Americans have many reasons for renovating or building a home, and COVID-19 is having an impact on which rooms they are looking to redesign,” Ferguson researchers said, adding that Americans “are split on what they’d look forward to most in renovating or building a home.
“About a quarter (27%) say it’s increasing the functionality of the home, while 26% say it’s having a new look (26%),” Ferguson said.
Among Americans who’ve made changes to their home in the recent past, top reasons were that they were tired of the home’s current style (35%), they wanted up-to-date technology (34%), or they were tired of the home’s color scheme (32%), the Newport News, VA-based company said.
A third (33%) of surveyed Americans say it is extremely or very important to have “smart home” functionality in their kitchen products. Twenty-six percent say it is extremely or very important to have “smart home” functionality in their bathroom products, Ferguson said.
Among other key survey findings:
- Most Americans, especially older Americans, would visit a showroom if they were to renovate or build a home. “It’s important to Americans to be able to touch and feel appliances/fixtures, see products in action and have access to whole-room product solutions” Ferguson said.
- If they were to renovate or build a home, over half of Americans would visit a store/showroom (51%). Older Americans are more likely than younger Americans to visit stores/showrooms (39% aged 18-29, 48% aged 30-44, 55% aged 45-60 and 68% aged 60+) to learn about products for their home.
- Seven in ten (70%) Americans say it is extremely or very important for them to be able to touch and feel appliances/fixtures in person before making a purchase decision.
When asked about the types of smart home products they’d be most interested in buying for their home, 42% said they would be interested in “smart” lighting and 37% said they’d be interested in “smart” refrigerators.