Headwinds in the market are slowing growth
The challenges on the supply side, As well as rising prices, labor shortages and limited inventories, continue to constrain growth in new construction, home sales and home improvement, even as all three sectors continue to expand, market analysts report. Among the main statistics and forecasts published in recent weeks by the government industry-related agencies, research firms and professional associations were:
IMPLEMENTATION OF HOUSING & SALES OF NEW HOUSES
Soaring building material costs, high demand and low inventories have added tens of thousands of dollars to the price of a new home, pushing housing affordability down to its lowest level in nearly a decade. the National Association of Home Builders said last month. Meanwhile, higher construction costs associated with supply chain challenges, labor shortages and rising home prices have pushed home builder confidence to its lowest level since July 2020. , reported the Washington, DC-based NAHB. “While demographics and interest in buying homes remain strong, higher costs and problems with access to materials have caused housing construction levels to drop and have even suspended some new home sales.” said Robert Dietz, chief economist of the NAHB. “As supply side limitations drag the market down, we expect production bottlenecks to ease over the next few months and the market to return to more normal conditions,” he said. said Dietz.
SALES OF EXISTING HOUSES
Rising mortgage rates “will soften demand and dampen price appreciation” of homes for sale by the end of the year, the chief economist of the National Association of Realtors said last month. According to the latest forecast from Lawrence Yun of the Washington, DC-based NAR, with lower buyer demand and housing starts improving to 1.65 million units in 2022 (up from about 1.565 million units). this year), the selling prices of existing homes are expected to increase. at a much slower pace next year – 4.4% compared to 14.1% this year. “The rise in house prices and the accompanying build-up of real estate wealth have been spectacular over the past year, but they are unlikely to be repeated in 2022,” Yun said. “The housing market appears to be going from ‘super hot’ to ‘hot’, with much slower price gains. “
More than three-quarters of companies in the construction and architectural / design services industries said product and material shortages and costs impacted their businesses in the second quarter of this year, while more half of both sectors said labor shortages and costs had an impact on their businesses. , according to Houzz, Inc., the online platform for home improvement and design. According to Houzz, more than nine in ten companies in both industries reported increases in lumber, copper, steel and aluminum costs in the second quarter. Additional materials that construction professionals predict will increase in cost include plastic, concrete, paint, foam and drywall, Houzz said, adding that more than nine in 10 construction companies report labor shortages. – moderate to severe skilled work, with carpenters, laborers, carpenters, cabinetry specialists and plumbers are particularly rare.
SALE OF CABINETS AND VANITIES
Leading domestic kitchen cabinet and vanity manufacturers continued to post substantial sales increases in the first seven months of 2021, the most recent in a series of monthly Kitchen Cabinet Manufacturers Association surveys. KCMA’s latest “business trends survey” reflected an 18.3% increase in sales since the start of the year. until July, compared to the same seven-month period period in 2020. Custom cabinet sales in the first seven months were reported up 21.5% over the same period last year, while semi-custom sales increased 17.6% and stock cabinet sales increased 18.1%, said the Reston, Va.-Based KCMA. July sales were up 7.2% from the same month last year, the association added.