Positive Signs Continue On

by WOHe

Positive Signs Continue On

A series of positive economic indicators continued to define the
health of the kitchen/bath and housing markets as the third quarter
of 1999 wound down, according to the latest figures released by the
government and industry-related trade associations.
Among the industry’s key statistical-related developments in recent
weeks were the following:

Cabinet & Vanity Sales
Sales of kitchen cabinets and bathroom vanities reverted in August
to a double-digit growth pace, after a minor slowdown in July,
accord-
ing to the Kitchen Cabinet Manufacturers Association. The Reston,
VA-based KCMA said that manufacturer-members participating in the
trade association’s monthly “Trend of Business Survey” reported
that cabinet sales for August rose 16% over August of 1998. Cabinet
sales
had slowed in July to a single-digit growth rate (8.1%) for the
first time in eight months. Year-to-date cabinet/vanity sales
through August were up 14.2% over sales in the January-August time
span in 1998.

Housing Starts
The nation’s home builders “remain relatively optimistic” about
their prospects for new-home sales, both now and in the foreseeable
future, the National Association of Home Builders reported last
month. The Washington, DC-based NAHB said that its latest Housing
Market Index derived from a monthly survey of builders revealed an
increase in current home buyer traffic, as well as in both current
and expected home sales. Housing starts as the fourth quarter began
remained at “impressive levels,” although they were below the
extremely high levels attained during the first three months of
1999, the NAHB observed. The trade association noted that, although
mortgage rates have been moving upward, “other factors have offset
most of the potentially depressing effects of these movements,” and
mortgage applications remain
relatively robust.

Existing-Home Sales
In spite of higher mortgage rates, existing home sales remain
“amazingly healthy,” according
to the National Association of Realtors. The Washington, DC-based
NAR reported last month that August resales represented the
tenth consecutive month of a seasonally adjusted level of five
million or more. NAR analysts predict another record-setting year
for existing-home sales, even in the face of higher mortgage rates
that have choked off refinancing and slowed home equity loans.
Rising mortgage rates “have done little damage to home sales,” the
NAR observed, adding that the underlying reasons for robust demand
for homes are strong growth, employment and wealth, rising real
wages and low inflation “all of which fuel consumer
confidence.”

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