‘Strong Growth’ Foreseen for Remodeling Through 2022
CAMBRIDGE, MA “Strong growth” in home improvement and maintenance expenditures is expected to continue over the coming year, according to the Leading Indicator of Remodeling Activity (LIRA), released last month by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The LIRA projects year-over-year gains in annual improvement and repair spending will reach 9% in the fourth quarter of this year and maintain that pace into 2022. Annual improvement and repair expenditures by homeowners could reach $400 billion by the third quarter of 2022, according to the Joint Center, which warned that “several headwinds” – including the rising costs of labor and building materials, as well as increasing interest rates – “could still taper expected growth.”
“Residential remodeling continues to benefit from a strong housing market with elevated home construction and sales activity and immense house price appreciation in markets across the country,” said Carlos Martín, project director of the Remodeling Futures Program at the Cambridge, MA-based Joint Center. “The rapid expansion of owners’ equity is likely to fuel demand for more and larger remodeling projects into next year.”
In related remodeling market news:
n The U.S. building products market will continue building on its “exponential growth” of the past two years, gaining an additional 2.9% from 2023 through 2025, with the professional sector increasing by 4.6%, according to a newly released forecast by the Home Improvement Research Institute (HIRI). The Indianapolis-based HIRI predicted that the total U.S. building products market will increase by 13% in 2021 over the previous year, with the professional sector growing by 18.2%. The total building products market is forecast to grow an additional 2.3% in 2022, with the professional sector growing by 7.1%, HIRI added.
n Businesses in the residential construction and remodeling sectors anticipate “strong activity” through the balance of 2021, although many companies report steady increases in backlogs since the beginning of the COVID-19 pandemic, along with wait times of nearly three months before new projects can begin, according to the Q4 2021 Houzz Renovation Barometer, a quarterly gauge that tracks market expectations, project backlogs and recent activity among U.S businesses in the construction and architectural/design services sectors. Results of the survey were released last month by Houzz Inc., the Palo Alto, CA-based online platform for home remodeling and design.
“Confidence prevails across the industry through year-end,” said Marine Sargsyan, Houzz senior economist. “We’ve seen some settling of home renovation and design activity following record high performance earlier in the year, yet many businesses are struggling to catch up with heightened demand as they navigate supply chain challenges and labor availability, leading to record-long backlogs.”
n Demand for remodeling remains strong, and remodelers “are doing quite well as long as they can adequately deal with material and labor shortages,” according to the latest Remodeling Market Index (RMI) compiled by the National Association of Home Builders. The NAHB last month released its NAHB/Royal Building Products Remodeling Market Index (RMI) for the third quarter of 2020, posting a reading of 87, up five points from the third quarter of 2020. The finding “is a signal of residential remodelers’ confidence in their markets, for projects of all sizes,” the NAHB said.
“We are seeing strong demand and continued optimism in the residential remodeling market, despite the fact that supply constraints are severe and widespread,” said NAHB Chief Economist Robert Dietz.
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Home Sizes, Suburban Shift Seen Increasing as COVID Offshoot
WASHINGTON, DC — Single-family home sizes are reportedly rising as an offshoot of the COVID-19 pandemic, reversing a recent trend toward downsizing, as homeowners are seeking additional residential space for a wider range of purposes, particularly teleworking and school-related activities.
At the same time, trade association officials are reporting a continued shift in new residential construction away from urban areas to lower-density, lower-cost suburban markets.
According to the latest analysis by the National Association of Home Builders, the median size of a newly built single-family home increased to 2,297 sq. ft., while the average size for new single-family homes increased to 2,540 sq. ft.
Since Great Recession lows, home sizes rose between 2009 to 2015 as entry-level new construction was constrained, according to the NAHB. In contrast, home sizes declined between 2016 and 2020, as more starter homes were developed, the NAHB said.
“Going forward, we expect home size to increase again, given a shift in consumer preferences for more space due to the increased use and roles of homes in the post-COVID-19 environment,” said Robert Dietz, chief economist for the Washington, DC-based NAHB.
The NAHB also reported that residential construction continued its yearlong shift toward the suburbs and lower-cost markets, a trend that’s especially pronounced within the multifamily sector.
According to the association’s latest Home Building Geography Index (HBGI), multifamily residential construction posted a 14.3% gain in small metro core and suburban areas during the second quarter of 2021, while large metro areas experienced a 0.5% decline for multifamily building activity.
“The trend of construction shifting from high-density metro areas to more affordable regions, which accelerated at the beginning of the pandemic, appears to be continuing,” said NAHB Chairman Chuck Fowke.
“There’s a marked increase in new apartment construction outside large metro areas, as people have greater flexibility to live and work in more affordable markets,” added Robert Dietz, chief economist for the NAHB.
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Activity Strong Although Project Backlogs Persist, Survey Finds
PALO ALTO, CA — Businesses in the residential construction and remodeling sectors anticipate “strong activity” through the balance of 2021, although many companies report steady increases in backlogs since the beginning of the COVID-19 pandemic, along with wait times of nearly three months before new projects can begin.
That is the key finding of the Q4 2021 Houzz Renovation Barometer, a quarterly gauge that tracks market expectations, project backlogs and recent activity among U.S businesses in the construction and architectural/design services sectors. Results of the survey were released this week by Houzz Inc., the Palo Alto, CA-based online platform for home remodeling and design. The survey was fielded Sept. 28 through Oct. 8th, the company added.
“Confidence prevails across the industry through year-end, despite the ‘Expected Business Activity Indicator’ dipping slightly compared with the very high level posted last quarter,” said Marine Sargsyan, Houzz senior economist.
“We’ve seen some settling of home renovation and design activity following record high performance earlier in the year,” Sargsyan observed. “Yet many businesses are struggling to catch up with heightened demand as they navigate supply chain challenges and labor availability, leading to record-long backlogs.”
More than half of surveyed firms in both the construction and architectural and design services sectors report challenges with product and material shortages and increased costs as of the beginning of Q4, Houzz said.
While only half of businesses anticipated heightened costs for raw materials – such as lumber, copper, steel, plastic, and aluminum – more than two-thirds reported that these materials actually increased in cost over the past quarter. More than nine in 10 construction businesses reported moderate to severe skilled labor shortages, Houzz added.
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Schock to Open First U.S. Factory
MARTINVILLE, VA — SCHOCK GmbH, the global supplier of quartz composite kitchen sinks, will establish its first U.S. manufacturing presence with the construction of a factory in Martinsville, VA, the company announced.
“We couldn’t be more excited to be embarking on this expansion,” said Ralf Boberg, CEO of the Regen, Germany-based company. “SCHOCK’s new facility in Virginia represents a bold, special new step for our company. While our sink products have been available worldwide for years, this is our first manufacturing plant outside of Germany.
“Adding manufacturing in the U.S. will allow us to serve one of our strongest growth markets and meet demand stateside, Boberg added.
The facility will manufacture quartz composite sinks, a category the company pioneered in 1979, SCHOCK officials added.
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SEN Design Group Expands Educational Access
CHARLOTTE, NC — SEN Design Group, the Charlotte, NC-based kitchen and bath industry buying group and business education resource, has revamped its membership structure to increase access to business education opportunities for industry professionals, the organization announced.
“Under our previous structure, the majority of our educational opportunities were add-on expenses for our members, but we wanted to make sure our members had access to as much educational content as they wanted without added expense, so we have updated our membership structure to provide this much-needed resource at a minimal monthly investment,” said Catherine Daugherty, director of membership at SEN Design Group.
SEN Design Group will now offer three tiers of membership with differing benefits based on the member’s specific needs:
n Associate Membership includes basic access to industry-specific business and sales education opportunities; this level is targeted for industry firms and independent designers who may not want to participate in a buying group or attend semi-annual conferences.
n Signature U Membership includes increased access to industry-specific business and sales education opportunities, as well as access to SEN Design Group’s purchasing power and networking community.
n Executive U Membership ($399 per month) includes everything in the Signature U Membership with additional benefits for industry leaders, such as dealer roundtables, a business development manual, personal profiling assessments for better hiring and communication, maximum quarterly rebates, and more.
Additional details are available at www.sendesigngroup.com.
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Fisher & Paykel Unveils Improved Digital Interface
COSTA MESA, CA — Fisher & Paykel, the Costa Mesa, CA-based supplier of high-end appliances, has launched a Trade Resources platform, a “next-generation solution” for the brand’s trade partners, the company announced.
Improving upon The Kitchen Tools interface that had previously served as a gateway for product access files for the A&D community and builders, the company developed the new program with leading global BIM software “to ensure a better user experience,” corporate officials said.
“The Trade Resources portal offers everything a trade professional might require, from project concept and modeling capabilities to post installation with specification documentation,” said Kevin Dexter, North American president for Fisher & Paykel. “We’ve developed this improved platform to ensure that architects, designers, builders, specifiers, developers and other industry professionals have a seamless experience with our brand from start to finish.”
Technical content available to users include 3D files for Revit, ArchiCad, Sketchup and Rhino, 2D CAD files in ‘dxf’ and ‘dwg’ formats, specifications guides, data sheets and planning guides, the company said. In addition, hinge articulation files, a higher level of dimensional information and alternative installation files, are available, Fisher & Paykel added.
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Architecture Firms Report Increased Demand for Services
WASHINGTON, DCArchitecture firms, including those focused in the residential sector, continued to report increasing demand for design services in September, according to a new report issued by the American Institute of Architects.
According to the Washington, DC-based AIA, the association’s monthly “Architecture Billings Index” (ABI) score for September was 56.6, up from August’s score of 55.6. Any score above 50 indicates an increase in billings from the prior month, the AIA said.
“The ABI scores over the last eight months continue to be among the highest ever seen in the immediate post-recession periods that have been captured throughout the index’s history,” said AIA Chief Economist, Kermit Baker.
Baker cautioned, however, that it’s “unlikely that revenue increases at architecture firms can sustain this pace.”
“Given that growth in both new design contracts and project inquiries have moderated in recent months, we expect to see a similar path for the ABI,” Baker said.
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Builder Confidence Up, Despite Supply Chain Disruptions
WASHINGTON, DC Strong consumer demand helped push builder confidence higher in October despite growing affordability challenges stemming from rising material prices and shortages, the National Association of Home Builders reported.
According to the Washington, DC-based NAHB, builder sentiment in the market for newly built single-family homes moved four points higher to 80 in October, according to the latest monthly NAHB/Wells Fargo Housing Market Index (HMI), released this week.
The NAHB also reported that single-family housing production held steady in September, at a seasonally adjusted annual rate of 1.56 million units, as strong demand helped to offset ongoing building material supply chain disruptions.
“Although demand and home sales remain strong, builders continue to grapple with ongoing supply chain disruptions and labor shortages that are delaying completion times and putting upward pressure on building material and home prices,” said NAHB Chairman Chuck Fowke.
“Builders are getting increasingly concerned about affordability hurdles ahead for most buyers,” added NAHB Chief Economist Robert Dietz. “Building material price increases and bottlenecks persist, and interest rates are expected to rise in coming months as the Fed begins to taper its purchase of U.S. Treasuries and mortgage-backed debt.
“Policymakers must focus on fixing the broken supply chain,” Dietz observed. “This will spur more construction and help ease upward pressure on home prices.”
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MoistureShield Expands Distribution Through BlueLinx Branches
ATLANTA — MoistureShield, the Oldcastle APG-owned manufacturer of composite deck boards and related products, has expanded its distribution throughout the northeastern U.S. with the addition of several BlueLinx branch locations, the company announced.
BlueLinx locations in Charlotte and Raleigh, NC, Denville, NJ, Yaphank, NY, Burlington, VT, Bellingham, MA and Portland ME will each offer the full line of MoistureShield composite decking products to its dealers, corporate officials said.
“We are excited to continue to grow our national footprint with BlueLinx with this significant expansion from North Carolina to the Northeast,” said Matthew Bruce, v.p./sales for MoistureShield. “As our portfolio and brand awareness continue to increase, we believe that the partnership with BlueLinx provides an amazing platform to support growth and share gain in the composite decking category.”
Oldcastle APG, North America’s largest manufacturer of Outdoor Living Products, is part the Building Products division of CRH, a leading global diversified building materials. MoistureShield serves a range of retail and distribution customers across North America and several international markets. BlueLinx is a leading U.S. distributor of residential and commercial building products, including lumber, panels, engineered wood, siding, millwork, metal building products, and other construction materials.
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‘Best of KBIS’ Awards Open for 2022 Entries
HACKETTSTOWN, NJ Entries are being accepted through Dec. 1 for the 2022 “Best of KBIS” Awards, an annual awards program that recognizes the most innovative new kitchen and bath products of the year, the National Kitchen & Bath Association announced.
According to the NKBA, owner of the Kitchen & Bath Industry Show (KBIS), products must have been introduced after Feb. 9, 2021 in order to be eligible for consideration. Categories include Kitchen–Gold; Kitchen–Silver; Bath–Gold; Bath–Silver; Connected Home Technology–Gold; Connected Home Technology–Silver; Best in Show, and Impact Award (Judge’s Choice).
The “Best of KBIS” awards ceremony will take place at the KBIS NeXT Stage in the South Hall on Wednesday, Feb. 9, 2022, at the Orange County Convention Center, Orlando, Fla.
Information can be obtained by visiting the NKBA’s website, www.nkba.org.
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