Markets Respond as COVID Impact Lessens
The nation’s housing, residential remodeling and kitchen/bath markets each continued to respond to post-COVID realities as 2021 enters its final months and the impact of the global pandemic dissipates. 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
Continuing a trend from the beginning of 2020, low-density, low-cost markets continue to outperform other regional geographies with respect to home construction, according to the National Association of Home Builders. “With the shift to telework brought on by the COVID-19 pandemic, housing demand continues to show the strongest gains in lower-density markets as people have flexibility to live outside some metro areas,” said Chuck Fowke, chairman of the Washington, DC-based NAHB. “As workplaces increasingly adopt hybrid work models, renters and buyers will have increased (need) to minimize travel times and reduce both housing and transportation cost burdens,” noted NAHB Chief Economist Robert Dietz, adding that homebuilding is expanding most rapidly in locations with the shortest commuting times.
Although housing supply continues to fall short of demand, additional inventory is expected to enter the market later this year as further COVID-19 vaccinations are administered and the number of homeowners in mortgage forbearance continues to decline, according to the National Association of Realtors. Although housing demand is still strong compared to one year ago, existing-home sales have lagged in recent months, the Washington, DC-based NAR reported, noting that total housing inventory was down more than 20% from a year ago. Despite the recent lag in sales, however, “the additional supply projected for the market should cool down the torrid pace of price appreciation later in the year,” NAR Chief Economist Lawrence Yun predicted. Total existing-home sales were pegged at a seasonally adjusted annual rate of 5.8 million units, up 44.6% from a year ago, according to the latest figures. “Home sales are now approaching pre-pandemic activity,” observed Yun. And although a lack of inventory continues to be the overwhelming factor holding back home sales, the outlook, Yun said, remains “encouraging.”
CABINET & VANITY SALES
Major domestic kitchen cabinet and vanity manufacturers continued to post strong sales gains through the first five months of 2021, as demand remains at record heights and the impact of COVID-19 continues to dissipate, according to the latest in a series of monthly surveys by the Kitchen Cabinet Manufacturers Association. The KCMA’s latest “Trend of Business Survey” reflected a year-to-date sales increase of 21.6% through May when compared to the same five-month period last year. Custom cabinet sales through the first five months of 2021 were up 23.5% over the same period last year, while semi-custom cabinet sales rose 21.3%, and stock cabinet sales gained 21.4%, the Reston, VA-based KCMA said, adding that overall May sales were up 32.9% compared to the same month last year. Survey participants include stock, semi-custom and custom companies whose combined sales represent approximately 75% of the U.S. kitchen cabinet and bath vanity market, according to the KCMA.