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8 | Kitchen & Bath Design News | September 2015 Barometers { A look at key statistics & trends shaping the industry } W hile the housing and remodeling markets con- tinue to advance in fts and starts, housing analysts remain op- timistic for continued growth through 2015 and into next year. Among the key statistics and forecasts released in recent weeks by government agencies, research frms and industry-related trade associations were the following: HOUSING STARTS While sharp gains in multi-family housing starts "show that the Millen- nial generation continues to be drawn to the rental market," sluggishness persists in the single-family housing sector, according to the National As- sociation of Home Builders. "While builders are reporting overall con- fdence in the housing market, they continue to note difculties access- ing land and labor," said David Crowe, chief economist for the Washington, DC-based NAHB. "These headwinds appear to be affecting production gains in the single-family sector." NAHB economists, nevertheless, con- tinue to point to building confdence and unwavering consumer demand as reasons for optimism. "We continue to hear from builders that there is solid trafc in sales ofces and a lot of consumer interest in new homes, which should bode well for sales mov- ing forward," said NAHB Chairman Tom Woods. "We knew there would be ups and downs on the road back to a normal housing market," added NAHB Senior Economist Robert Denk. "As the economy and job growth strengthens, we expect to see gradual, continued momentum in the coming months." EXISTING-HOME SALES Backed by a recent solid gain in sales, this year's spring buying season for ex- isting homes has been the strongest since the housing downturn, the Na- tional Association of Realtors reported last month. According to Lawrence Yun, chief economist for the Washington, DC-based NAR, homebuyers "have come back in force," leading to the highest pace for resales in more than eight years. "This wave of demand is being fueled by a year-plus of steady job growth and an improving econo- my that's giving more households the fnancial wherewithal and incentive to buy," Yun said. Sales, he observed, have also likely been "propelled by the spring's initial phase of rising mort- gage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher." Yun cautioned, however, that limited inventory coupled with strong demand continues to push home prices higher, leading to declin- ing afordability for prospective buyers. CABINET & VANITY SALES Sales of kitchen cabinets and vani- ties continued its year-long pattern of gains in June, posting an increase over sales for the same month in 2014, the Kitchen Cabinet Manufacturers Asso- ciation said last month. According to the Reston, VA-based KCMA, manufac- turers participating in the association's monthly "Trend of Business" survey re- ported that June sales of cabinets and vanities increased 9.2% over June of 2014. Sales of stock cabinets increased 17.4%, while semi-custom cabinet sales rose 0.9% and custom cabinet sales gained 13.7%, the KCMA said. Year- to-date sales through June were up 8.1% compared to the same six-month period last year, the KCMA added. APPLIANCE SHIPMENTS Domestic shipments of major home appliances rose sharply in July com- pared to shipments in July of last year, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM report- ed last month that July 2015 appliance shipments totaled 5.60 million units, up 11.2% from the 5.03 million units shipped in July, 2014. Year-to-date shipments for the frst seven months of 2015 were up 6.2% over January- July shipments in 2014, AHAM said. Cambridge, MA — The extended easing of gains in res- idential-improvement spending is expected to change course by early next year, according to the latest forecast by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The Joint Center's latest "Leading Indicator of Remod- eling Activity (LIRA)," released last month, projects that annual spending growth for home improvements will ac- celerate to 4% by the frst quarter of 2016. Previous LIRA reports had forecast a slowdown in residential-improve- ment spending growth. "A major driver of the anticipated growth is the recent pick-up in home sales activity," said Chris Herbert, managing director of the Cambridge, MA-based Joint Center. "Recent homebuyers typically spend about one-third more on home improvements than non-movers, even after controlling for any age or income diferences, so increasing sales this year should translate to stronger improvement spending gains next year." "Other signals of strengthening remodeling activity include sustained growth in retail sales of home improve- ment products and ongoing gains in house prices across much of the country," noted Abbe Will, a research analyst in the Remodeling Futures Program at the Joint Center. "Rising home prices means rising home equity, which should encourage improvement spending by a growing number of owners," Will added. Home Remodel Spending Seen Accelerating Into Early '16 MARKET ANALYSIS Analysts Upbeat Over Prospects For Continued Housing Gains Confdence among home builders and residential remodelers, as seen here, remains a refection of housing market recovery. Builder confdence in the market for new single-family homes, refected in the latest Housing Market Index (HMI), is currently at its highest level since November, 2005. Derived from a monthly survey, the HMI gauges builder perceptions of current and expected single-family home sales, sales expectations and buyer trafc. At the same time, the quarterly Remodeling Market Index (RMI), in positive territory for nine quarters in a row, rose again in the second quarter of 2015. The RMI averages ratings of current remodeling activity with indicators of future activity. An RMI above 50 indicates that more remodelers report activity is higher compared to the prior quarter than report it is lower. Source: National Association of Home Builders THE GROWING CONFIDENCE OF HOME BUILDERS & REMODELERS Housing Market Index (HMI) Seasonally Adjusted National HMI, by Month Remodeling Market Index (RMI) Seasonally Adjusted National RMI, by Quarter 57 55 52 56 54 60 60 JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY 1st QTR 53 57 59 56 57 60 2014 2014 2014 2014 2015 2015 2nd QTR 3rd QTR 4th QTR