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Barometers { A look at key statistics & trends shaping the industry } 8 | Kitchen & Bath Design News | July 2015 T he nation's housing market continues to demonstrate palpable signs of recovery, although residential construction remains well of pre-recession highs. Among the key statistics and forecasts released in recent weeks by govern- ment agencies, research frms and industry-related trade associations were the following: HOUSING STARTS Nationwide housing starts are at their highest level since November of 2007, although single-family housing "is still only about halfway back to what could be considered a normal market," the chief economist for the National Associ- ation of Home Builders said last month. "With low interest rates and afordable home prices, we expect more upward momentum in the months ahead," noted David Crowe of the Washington, DC-based NAHB. Markets in 68 of the approximately 360 metro areas nation- wide returned to or exceeded their last normal levels of economic and housing activity in the frst quarter of 2015, a year-over-year net gain of seven mar- kets, the NAHB said, adding that lower interest rates and home prices also con- tributed to a solid boost in nationwide afordability in the frst quarter of 2015. EXISTING-HOME SALES Existing-home sales are expected to fnish the year at their highest pace since 2006, but accelerating price growth and rising mortgage rates have the potential to slow sales, ac- cording to the National Association of Realtors. Lawrence Yun, chief econo- mist for the Washington, DC-based NAR said last month that existing- home sales are measurably higher than a year ago, and strengthened as the spring buying season got un- derway. "Sustained job growth and interest rates below 4% have been the catalyst behind the improvement in sales," Yun said. After falling below a pace of 5 million in 2014, Yun expects home sales to rebound and steadily improve, ending up at a pace around 5.3 million this year and 5.5 million in 2016 (see related table below) . RESIDENTIAL REMODELING Remodelers report that bathroom and kitchen remodels remain their most popular projects, while homeown- ers' top motivation for remodeling is to upgrade with newer, better features in their homes. According to the latest National Association of Home Builders Remodelers' survey, "homeowners have more discretion- ary funds available for upgrades, so better style, comfort and safety motivate more home improvement projects." Bathroom and kitchen remodels were up 6% and 7%, re- spectively, from the previous survey, NAHB researchers said. After baths and kitchens, the most popular remodeling projects are window/ door replacements, whole-house remodels, room additions, property damage repairs and handyman ser- vices, the NAHB said. APPLIANCE SHIPMENTS Domestic shipments of major home appliances rose sharply in April com- pared to shipments in April of last year, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that April 2015 appliance shipments totaled 6.66 mil- lion units, up 18.3% from the 5.63 million units shipped in April, 2014. Year-to-date shipments for the frst four months of 2015 were up 5.6% over January-April shipments in 2014, AHAM said. Des Plaines, IL — The combination of homeowner desire for improvements in their homes and a more stable economy is translating into "solid business conditions" for the nation's residential remodeling market. So says the National Association of the Remodeling In- dustry, which last month released its frst-quarter 2015 "Remodeling Business Pulse," containing data about current and future remodeling business conditions. Surveyed in March, NARI contractors reported that cur- rent business conditions – including such factors as number of inquiries, requests for bids and conversion of bids to jobs – are better than they were at the same time in 2014. The latest data "suggests good current growth, but a possible moderation in pace versus that experienced earlier in the year," according to the Des Plaines, IL-based NARI. "I see a large amount of interest in work based on pent- up demand," said Tom O'Grady, chairman of NARI's Strategic Planning & Research Committee. "We see this pent-up demand driving the market for the foreseeable future," O'Grady said. "Homeowners are feeling better about where the economy is going, but they remain somewhat cautious," O'Grady added. "Having short-term liquid assets to spend appears to be a driver of when they actually will start a remodeling project." Higher Demand Seen Resulting In Solid Business For Remodelers MARKET ANALYSIS Market on Upswing, Though Still Of Pre-Recession Highs 2013 2014 2015 Forecast 2016 Forecast Housing Starts 925,000 1,001,000 1.1M 1.4M New-Home Sales 430,000 437,000 570,000 720,000 Existing-Home Sales 5.1M 4.9M 5.3M 5.5M Median Price Growth +11.5% +5.7% +6.0% +4.0% 30-Year Rate 4.0% 4.2% 4.0% 5.2% Underwriting Standards Strict Strict Transition Normal MID-YEAR 2015 FORECAST FOR THE U.S. HOUSING MARKET As the table above illustrates, 2015, by year's end, will witness palpable recovery in most key housing indices, with the market upswing accelerating into next year, thanks largely to continued low interest rates, pent-up demand and afordable home prices. Source: National Association of Realtors