Strong Results Seen For Year-End, ’04

by WOHe

Strong Results Seen For Year-End,


2003 will apparently conclude on a positive note for the housing
and kitchen/bath markets, while the latest forecasts are revealing
that next year should be another positive year for housing starts,
home sales and key building product shipments. Among the key
statistics released by government agencies, research firms and
industry-related trade associations in recent weeks were the

After surging to a record in July, home sales can be expected to
dip slightly, but hold at historically strong levels through next
year, the National Association of Realtors said last month.
According to David Lereah, chief economist for the Washington,
DC-based NAR, the recent rise in mortgage interest rates was one of
the fastest on record. “But even with the increase, mortgage
interest rates currently are below the average for all of 2002,”
Lereah said. “Given that last year was a record for home sales,
today’s interest rates are still very attractive and will keep
sales at relatively strong levels going forward.” Lereah said the
NAR is forecasting only a modest rise in interest rates through the
balance of this year. The trade association is forecasting a record
of 5.76 million existing-home sales this year, up 3.5% from 5.57
million sales in 2002. New-home sales are seen gaining by 5.4%, to
a record of 1.03 million units. Housing starts should increase 1.7%
to a total of 1.73 million units. Home sales are likely to slow 6%
to 7% next year, Lereah added. Even so, that would be the
third-best year on record, he said.

The latest figures on housing starts and building permits, coupled
with the latest builder surveys, underline “very positive
expectations [for the nation’s housing market] heading into 2004,”
the National Association of Home Builders said last month. The
Washington, DC-based NAHB said the latest housing statistics have
provided “ample evidence” for the association to raise its forecast
for 2003 housing starts to 1.76 million units up about 3% from last
year’s “healthy production,” said NAHB chief economist David
Seiders. “Builders had one of the hottest summers ever this year in
terms of housing demand, largely because of the incredibly
favorable interest rates just before mid-year,” said NAHB President
Kent Conine. He added that, despite the recent rise in rates,
“there’s a strong current of optimism that today’s very healthy
activity is sustainable through at least the end of this

Domestic shipments of major home appliances are expected to
slightly better their current record-setting levels in 2004, once
again exceeding 70 million units shipped, according to the
latest forecast by the Association of Home Appliance Manufacturers.
AHAM’s latest forecast, issued in September, projects 70.60 million
total appliances being shipped next year, up slightly from the
record 70.47 million units expected to be shipped this year (see
related graph, above). Domestic appliance shipments have increased
dramatically over the past 10 years, according to the Washington,
DC-based AHAM. 2004 appliance shipments are expected to increase,
or at least hold to current levels, in all product categories, AHAM

Sales of kitchen cabinets and bathroom vanities increased 12.5% in
August compared to the same month a year earlier, the Kitchen
Cabinet Manufacturers Association said last month. The Reston,
VA-based KCMA noted that manufacturers participating in the
association’s monthly “Trend of Business” survey reported
year-to-date sales through August were up 10.5% over sales during
the same eight-month period in 2002.


Market Analysis

Remodeling Sector Posts Second-Quarter
Surge, New Survey Reveals

Washington, DC Professional remodelers, including
kitchen and bath specialists, were busier in this year’s second
quarter than they have been at any time in the past two years, and
most expect business to continue improving throughout the coming

That’s the conclusion of the latest Remodeling
Market Index (RMI), issued by the Washington, DC-based National
Association of Home Builders last month.

“Surging home sales, steadily rising home values
[against which people borrow to finance improvements] and a
low-interest-rate environment all contributed to the pick-up in
remodeling in the second quarter,” said NAHB Remodelors Council
chairman Mike Weiss. “Moreover, signs of an improving economy and
rejuvenating consumer confidence mean the future is looking even
brighter for professional remodelers,” Weiss noted.

The latest RMI was based on a quarterly survey of
about 550 professional remodelers, whose answers to a series of
questions were assigned numerical values in order to calculate
current market conditions, as well as future expectations. Both
indexes recorded substantial gains in this year’s second quarter,”
the NAHB Remodelors Council said.

“What’s remarkable is that almost every category
under the future expectations index showed gains from both the
first quarter of this year and the year-ago period,” said NAHB
chief economist David Seiders. “Remodelers are registering
substantially more calls for bids, commitments for work over the
next three months and backlogs of jobs in the pipeline than they
have since at least the beginning of last year. That’s a good basis
for a truly optimistic outlook.”

Related Posts

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More