Looking ahead to modest growth
Orlando, Fla. — The Home Improvement Research Institute’s Spring Conference included a mixed message for future home improvement spending.
In a presentation from James Gillula, managing director of consulting services for IHS Global Insights, one of the takeaways was an expectation of modest growth for consumer spending in 2013.
“There is a lot of hope that we’ll get to a point where we’ll have a little faster economic acceleration,” Gillula said. “And certainly the idea that there should be a lot of pent-up demand out there is relevant for home improvement products market.“
One of the key slides from Gillula’s “Outlook for the U.S. Economy and Home Improvement Spending” presentation looked at the nominal dollar and constant dollar market forecast. The forecast varied depending on whether the sales forecast was measured in nominal dollars or constant prices.
Nominally, the home improvement product market forecast called for growth to slow to 4.3% in 2013, compared with 5.4% growth in 2012. In constant prices, sales growth is expected to increase from 2.9% in 2012 to 3.4% in 2013. Both measures show accelerated growth in 2014, according to IHS Global.
The Home Improvement Research Institute is a membership-based, independent, not-for-profit organization of about 80 manufacturers, retailers, wholesalers and allied organizations in the home improvement industry.
Sales of existing homes slip slightly
Existing-home sales declined in March from inventory constraints, which continued to pressure home prices, according to the National Association of Realtors.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 0.6% to a seasonally adjusted annual rate of 4.92 million in March, from a downwardly revised 4.95 million in February,
Compared with a year ago, existing home sales are up 10.3%.
"Buyer traffic is 25% above a year ago when we were already seeing notable gains in shopping activity," said Lawrence Yun, NAR chief economist. "In the same time frame housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents."
The NAR also reported that the median existing single-family home price was $185,100 in March, up 12.1% from a year ago.
Total housing inventory at the end of March increased 1.6% to 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace, up from 4.6 months in February. Listed inventory remains 16.8% below a year ago when there was a 6.2-month supply.