Kitchen & Bath Design News

MAY 2018

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A STRONG LABOR market, risin incomes and a growing economy are fueling growth in the markets for housing and remod- eling, although indicators remain uneven in the face of headwinds that include weakening af- fordability conditions and tight supply. Among the key statistics and forecasts released in recent weeks by government agencies, research firms and industry-related trade associations were the following: HOUSING START Recent growth in single-family housing pro- duction is in line with its forecast for "gradu al, modest strengthening in this sector," the National Association of Home Builders said last month. The Washington, DC-based NAHB issued its statement after a significant decline in multi-family starts pushed overall housing production down to a seasonally adjusted annual rate of 1.24 million units. "The uptick in single-family production is consistent with builder optimism [that] continues to be fueled by growing demand and confidence in the market," said NAHB Chairman Randy Noel. "A strong labor market, rising incomes and a growing economy are boosting demand for homeownership, even as interest rates rise," added Chief Economist Robert Dietz. "With these fundamentals in place, the single-family sector should continue to make gains in the months ahead." EXISTING-HOME SALE The "very healthy" economy and labor marke are creating sizable interest in buying an ex isting home, although weakening affordability conditions and extremely tight supply continue to be pressing issues, according to the National Association of Realtors. The Washington, DC-based NAR said last month that, despite a recent rebound in resales, consistently low inventory levels coupled with price growth con tinue to hamstring the market. "Mortgage rates are at their highest level in nearly four years, at a time when home prices are still climbing at double the pace of wage growth," said Lawrence Yun, NAR chief economist. In order to fully sat isfy demand, most markets "need a substantial increase in listings," Yun added. CABINET & VANITY SAL Sales of kitchen cabinets and vanities rose marginally in February compared to sales in February 2017, the Kitchen Cabinet Manufacturers Association said last month. According to the Reston, VA-based KCMA manufacturers participating in the associa tion's "Trend of Business" survey reported tha February sales of cabinets and vanities were 1.8% above those of February last year. Sales of stock cabinets rose 1.6%, while semi-custom cabinet sales declined 0.4% and custom cabinet sales gained 11.3%, the KCMA said. Year-to-date sales through February were down 0.6% com- pared to the same two-month period in 2017, the association added. APPLIANCE SHIPMENT Domestic shipments of major home appliances advanced in February after a sluggish start to 2018, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that February appliance shipments totaled 6.06 million units, up 3.5% from the 5.80 million units shipped during the same month last year. Despite the February gain, however, year-to date sales through February remained 3.6% lower than sales during the same two-month time span last year, AHAM said Tariffs on Steel, Aluminum Imports Seen Hurting Housing WASHINGTON, DC — The Trump Administr tion's plan to impose tariffs on steel and alumi- num imports is being met with sharp criticism from trade associations tied to housing. Officials from the National Association of Home Builders and the American Institute of Architects said last month that tariffs on steel and aluminum imports would ultimately translate into higher costs for home builders and residential architects "It's unfortunate that President Trump has decided to impose tariffs of 25% on steel imports and 10% on aluminum imports," said NAHB Chairman Randy Noel. "Tariffs hurt consumers and harm housing affordability." The tariffs, said AIA President Carl Elefante, "threaten to drastically increase the price of many building materials," including structural metal beams, window frames, me- chanical systems and exterior cladding "Any move that increases building costs will jeopardize the construction industry, which is responsible for billions in GDP, economic growth and job creation," Elefante added Housing Market Improving, But Unevenl This year is expected to be a 'robust one' for residential remodeling, with growth accelerating a the year progresses and 2018 posting the strongest gains for residential remodeling in more than a decade. Projections, as reflected in the graph above, estimate that homeowner spending on improvements and repairs will approach $340 billion in 2018, a gain of 7.5% over 201 Source: Joint Center for Housing Studies, Harvard Un THE PROJECTED 2018 GROWT FOR RESIDENTIAL REMODEL Homeowner Improvements & Repairs, in Billions of Dollar $298.2 $338.6 $314.8 $330.8 $309.4 $324.6 $303.6 $318.7 Q1 Q2 Q3 Q4 2017 2018 12 Kitchen & Bath Design News • May 2018 BAROMETERS A LOOK AT KEY STATISTICS & TRENDS SHAPING THE IND MARKET ANALYS

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