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Barometers { A look at key statistics & trends shaping the industry } Recovery Seen Well Underway at Mid-Year A ll indications are that the nation's housing market – along with the related residential remodeling and kitchen/bath sectors – are in the midst of a slow and steady path toward recovery, analysts said last month. Among the key statistics and forecasts released in recent weeks by government agencies, research frms and industry-related trade associations were the following: the strength in permit issuance for single-family units, David Crowe, chief economist for the Washington, DC-based NAHB, said that evidence continues to mount that "housing continues on a slow and steady path to recovery." The latest fgures for nationwide housing starts point to a seasonally adjusted annual rate of 914,000 units, up sharply from last year's totals, the NAHB said. HOUSING STARTS EXISTING-HOME SALES The outlook for the nation's housing market "continues to brighten," and while challenges with regard to the cost and availability of building materials, lots and labor are still keeping the pace of improvement in check, "both builders and consumers are more confdent about their prospects in the current marketplace," the National Association of Home Builders said last month. Pointing to Pending sales of existing homes rose to their highest level since December of 2006, suggesting a potential spike in sales as mortgage interest rates began to rise and fence-sitting consumers enter the market before rates rise too high, according to the National Association of Realtors. The Washington, DC-based NAR also projected that home prices are expected to rise more than 10% this year, the strongest increase since 2005, while existing-home sales are projected to increase nearly 9%, reaching about 5.07 million units, the highest level in seven years and slightly above the 5.03 million total recorded in 2007. "The hou si ng nu mber s are overwhelmingly positive," commented Lawrence Yun, chief economist for the NAR. THE NATION'S DECLINING RATE OF HOMEOWNERSHIP '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 The U.S. homeownership rate fell 0.7% from 2011 to 2012, to 65.4%, and then continued to trend down in the frst quarter of 2013 to 65%, extending an eight-year drop decline, as refected in the graph above. The U.S. homeownership rate is currently at its lowest level in nearly 18 years, refecting rising demand for rentals and investor purchases in the housing market. Low levels of homeownership also tend to create a drag on investments for residential remodeling, including kitchen- and bath-related purchases. APPLIANCE SHIPMENTS Domestic shipments of major home appliances were once again essentially fat in May compared to shipments during the same month in 2012, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that May appliance shipments totaled 5.51 million units, down 0.4% from Source: Joint Center for Housing Studies, Harvard University Sales of kitchen cabinets and vanities continued to post signifcant gains in May, rising 16.0% compared to the same month in 2012, the Kitchen Cabinet Manufacturers As- sociation said last month. According to the Reston, VA-based KCMA, manufacturers participating in the association's monthly "Trend of Business" survey reported that sales of stock cabinets rose 21.3%, while semicustom sales gained 11.1% and custom cabinet sales increased 18.2%. Year-to-date sales through May were up 16.3% compared to the same fve-month period last year, the KCMA reported. of double-digit percentage increases in multi-family construction, according to the Cambridge, MA-based Joint Center for Housing Studies. But the fip side of the strong rental market was the continued slide in homeownership rates. "Even as historically low interest rates have helped make the monthly cost of owning a home more favorable than any time in the past 40 years, the national homeownership rate fell for the eighth straight year in 2012," said Eric Belsky, managing director of the Joint Center. "The drop was especially pronounced for 25-54 year olds, whose homeownership rates were at their lowest point since recordkeeping began in 1976." "Tight credit is limiting the ability of would-be homebuyers to take advantage of today's affordable conditions and likely discouraging many from even trying," said Chris Herbert, director of research at the Joint Center. "At issue is whether, and at what cost, mortgage fnancing will be available to borrowers across a broad spectrum of incomes, wealth and credit histories moving forward." And, while the recovery is good news for many, the number of Americans shelling out half or more of their incomes on housing is at an all-time high, according to Harvard researchers. At last count, 20.6 million households were shouldering such severe burdens, including nearly seven out of 10 households with annual incomes of less than $15,000 (roughly equivalent to year-round employment at the minimum wage), the Joint Center said. the 5.53 million units shipped in May, 2012. Year-to-date shipments were up 2.7% for the frst fve months of 2013, compared to January-May of 2012, AHAM reported. CABINET & VANITY SALES MARKET ANALYSIS Housing Recovery 'Well Underway,' Although Costs Seen Burdensome 8 | Kitchen & Bath Design News August 2013 Washington, DC — Driven by rising home prices and growing demand, the U.S. housing recovery is "well underway," concludes the annual State of the Nation's Housing report, released last month by the Joint Center for Housing Studies of Harvard University. While still at historically low levels, the report found that housing construction has fnally turned the corner, giving the economy a much-needed boost. However, even as the recovery gains momentum, millions of homeowners are still delinquent on their mortgages or owe more than their homes are worth, and severe housing cost burdens have set a new record. Driven by an increase of 1.1 million renter households, last year marked the second consecutive year