The Home Improvement Research Institute’s (HIRI) March 2013 Pulse of the Industry Webinar shed more light on signs of growth in the remodeling industry from a variety of sources. Here are the highlights:
- The March 2013 HIRI Size of Market Report, which forecasts activity in the home improvement products market in the U.S., shows an overall 5.4% increase in home improvement product sales in 2012 and 5.8 percent increase in the professional market sales for the year. The report expects an average growth of 5.9% during the 2014 to 2015 cycle.
- The U.S. Census Bureau placed January retail sales in the building materials and supplies dealer sales up 5% from Jan. 2012. Also, according to the U.S. Census Bureau, 12-month forecasts in residential improvement spending are estimated to have a 10.1% increase through Jan. 2013 versus the same time last year.
- Those in the Northeast should take note of new data from HIRI’s quarterly Sentiment Tracking Studies, which measures project planning and consumer attitudes toward home improvement. The January 2013 study used ZIP code analysis of homeowners to measure the impact of Hurricane Sandy. The study found those in the Sandy Zone had a higher average of planned projects (4.6 projects compared to 3.5 outside the region), and 80% from the Sandy Zone are planning one or more projects, compared with 71% of homeowners planning located outside.
- New single-family home sales landed at 437,000 in January 2013, up 15.6% from December 2012, and up 28.9% from January of last year. All regions had double-digit growth in new home sales since last year.
- The National Association of Realtors (NAR) reports existing single-family home sales at 4.34 million in January 2013, up 8.5% from the same time last year. The West Coast lags behind as the only region experiencing declines in the last year.
- Existing single-family housing inventory is declining as demand increases. NAR data shows a 30.6% housing supply decline from January 2012. Pending home sales are at the highest point since April 2010, just before the homebuyer tax credit deadline and are up 9.5% since January of last year. Again, the West Coast stands out as the only region with a 1.5% drop from same time last year.
- S&P/Case-Shiller Home Price Indices national composite for home prices posted a 7.3% increase for 2012.
- NAR placed January 2013’s housing affordability at the highest index since February 2012. The Northeast and Midwest regions outpace the South and West in year-over-year increases in housing affordability.
Though overall the picture is positive, there are several factors that continue to hinder remodeling. The unemployment rate is still concerning at 120 million, though it decreased slightly in February to 7.7%. Also noteworthy is the Bureau of Economic Analysis’ declining disposable personal income, down 4% from January 2013 to December 2012. This decline is likely tied to increased Social Security contributions and tax policy. Another cause of concern is the continuous decline in homeownership. This remains at its lowest point since 2007, at 65.4%.—Morgan Zenner