STATE OF HOUSING


At the Kitchen Cabinet Manufacturers Association, we always try to keep an eye on the housing industry. The kitchen is the heart of the home after all, and if housing isn’t doing well, then cabinets aren’t doing well. Here’s an update on how things are looking for housing lately.

Annual growth in the national market for home improvement and repair is expected to slow considerably by the end of the year, according to the latest Leading Indicator of Remodeling Activity (LIRA) report from the Harvard Joint Center for Housing Studies. Gains are expected to shrink from 7.5% in 2018 to 5.1% in 2019.


Photo courtesy of Harvard Joint Center for Housing Studies

According to the 2019 Houzz Kitchen Trend Study, 78% of homeowners surveyed noted that cabinets were the most important feature to upgrade during a remodel. This means that if remodeling activity is expected to slow, it could adversely affect cabinet companies.



The report cites slowing house price appreciation, flat home sales activity and rising mortgage rates are decreasing owners’ interest in making major investments in home improvements this year. In addition, The National Association of Homebuilders (NAHB) recently reported on how the shut down is negatively impacting the housing industry:


  • FHA-insured single-family loans can still close during the shutdown but that decision will be determined by each individual lender
  • No new multifamily firm commitments will be issued
  • No Real Estate Assessment Center (REAC) inspections will occur during the shutdown
  • Future reports on items like housing starts and new home sales could be postponed
The Office of Single-Family Housing will not endorse Home Equity Conversion Mortgages (HECMs and also referred to as FHA reverse mortgages) during the shutdown.

Photo courtesy of NAHB.
The government is now closing in on one month of the shut-down and it is not yet known how long it could last, and what the long-term impacts might be on housing for the remainder of the year.

Despite the seemingly negative outlook, improvement and repair spending is still set to expand this year to more than $350 million. And, remodelers' confidence is holding steady as many factors for the remodeling market (including demographics and economic growth) remain favorable.

-----------

KCMA is committed to providing our members with the latest industry information. Visit our website to learn more about becoming a member today.

Comments

Post a Comment

Popular posts from this blog

Image
INDUSTRY NEWS UPDATE AUGUST 21, 2019 It's been anything but a lazy summer for the Kitchen Cabinet Manufacturers Association - check out what's been happening in the cabinet industry the last few weeks: REMODELING SPENDING EXPECTED TO SLOW According to the Leading Indicator from the Joint Center for Housing Studies of Harvard University, remodeling activity is declining drastically. Home improvements and repairs are expected to drop  from 6.3% this quarter to less than 1% by the second quarter of the next year.  The decline may be attributed to the fact that home price appreciation has slowed and isn’t outpacing income growth like it once did in some markets. “Declining home sales and home building activity coupled with slower gains in permitting for improvement projects will put the brakes on remodeling growth over the coming year,” said Chris Herbert, Managing Director for Housing Studies. Click here to read more. ATTRACTING MILLENNIAL AND GEN Z TALENT Th...
Read more
Image
This Year's Favorite Cabinet Style is Green Today’s consumers and homeowners are all about living a green lifestyle – one that is aligned with environmental responsibility and sustainability. This is a lifestyle that extends beyond the simple green choices like buying organic produce and recycling. People are looking for opportunities that have a positive impact on the environment. And that’s why more and more of them are looking for the KCMA Environmental Stewardship Program (ESP) Seal on their cabinets. The KCMA Environmental Stewardship Program is committed to ensuring that cabinet manufacturing companies are aligned with Green best practices for organizations. The National Green Building Standards (NGBS), an ANSI standard, is the leading green residential building rating system in the United States. NGBS certification ensures that residences are independently verified by a third party for compliance with a comprehensive green standard. KCM...
Read more