News

Housing Market Gaining on Multiple Fronts

December 2016

The U.S. housing market has continued to strengthen throughout this year and October 2016 continued the trend with notable gains in building permits, housing starts and housing completions according to information released by the U.S. Census Bureau.

Single-family building permits were at a rate of 762,000, a 2.7% above the revised September figure of 742,000. Single family housing starts also saw notable gains with an increase in 10.7% above the revised September rate. Single-family housing completion sin October were at a seasonally adjusted annual rate of 749,000, this is a 3.9% increase above the previous month.

Privately-owned housing building permits had a small increase of 0.3% from September, however a 4.6% increase over October 2015. Housing starts were at a seasonally adjusted rate of 1.323 million, a 25.5% increase above September and a 23.3 percent increase over the same month in 2015. Housing completions grew 5.5% over the September rate of 1 million.

U.S. Economy: GPD Growth in Third Quarter

November 2016

The U.S. Economy pushed ahead and surpassed expectations with a 2.9% increase in GDP during the third quarter according to The Bureau of Economic Analysis (BEA). This is more than double the 1.4% increase in the second quarter and is inching towards the pre 2009 recession growth rate of 3%.

The recent advances in GDP was very broad based, with most industries advancing however a push from consumer spending and exports helped strengthen this quarters GDP. Overall the acceleration in growth is encouraging and economists are expecting continued growth over the next few quarters.

real-growth

Optimism for the Remodeling Market

November 2016

The National Association of Home Builder (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the third quarter for 2016, an increase of four points from the previous quarter.

The overall RMI is an average of two main sub-indices, one that tracks current market conditions and another tracking future market conditions. Along with the current indicators, future market conditions increased by 5 points from the previous quarter to 58.

An RMI above 50 indicated that more remodelers report market activity is higher compared to the previous quarter. “Remodelers nationwide are seeing increased demand for major and minor addition jobs and calls for bids, leading to an increase in both current and future market indicators,” says 2016 NAHB Remodelers chair Tim Shigley, CAPS, CGP, GMB, GMR, a remodeler from Wichita, Kan. “However, ongoing labor shortages continue to challenge their ability to meet the increased demand.”

Remodeling is currently being driven by the rising home values and tightening of for-sale inventories in many markets around the county.

U.S. Home Sales Increase in September

November 2016

According to the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family houses in September 2016 were at a seasonally adjusted annual rate of 593,000. This is a 3.1% increase from the August rate of 575,000 and 29.8% above the September 2015 estimate of 457,000.

For more information, please visit U.S. Census Bureau

U.S. Economy: Positive Signs for GDP

October 2016

usThe Bureau of Economic Analysis (BEA) released the revised second quarter GDP growth of 2016. Real GDP grew at a 1.4% seasonally adjusted rate, a modest increase from the 1.1% previous estimate. The growth can be attributed to strength from consumer spending, bottoming out of oil prices and a rebound in equipment spending.

This growth in GDP seems to be accelerating following two quarters below 1% growth. Economists are predicting that the third quarter of 2016 will ramp up the GDP growth rate with forecasts as high as 3.1%.

With about two-thirds of total output coming from consumer spending, a 4.3% increase, with last quarter’s gain being the largest increase since 2014. It comes as no surprise that consumer confidence has also strengthened to its highest level in nine years. The Conference Board’s consumer-confidence index increased to a seasonally adjusted 104.1 in September, marginally higher than the estimated 99.1 that economist expected during September.

“Growth is a lot stronger than it looks” based on first-half GDP figures, said Scott Brown, chief economist at Raymond James & Associates. “We’re still seeing a pretty strong jobs market, we expect wage growth to pick up, and gasoline prices are relatively low. That’s all a pretty good backdrop.”

Economic Impact of the Housing Market: New Construction

October 2016

Following the housing market bubble burst, 7 years later the housing market has in part recovered to pre-recession times. But what does that mean for the economy?

According to data released by the National Association of Home Builders (NAHB) the economic impact of the housing has a substantial effect on the overall economy. For every 1,000 single-family homes built approximately 2.975 jobs are created and totals of $116 million in net business income. Looking deeper into the jobs created approximately half are in construction alone.

The impact of 2,000 apartments built result in 2 jobs created with about half of those in construction and manufacturing. This would bring a total of $46 million in net business income with $25 million in construction and $7 million in manufacturing.

For more information: NAHB

Today’s Kitchen Design Trends

October 2016

Kitchens are a gathering place in most homes and it comes to no surprise that kitchen and bath remodels are most common. According to Harvard Joint Center for Housing Studies (HJCHS), kitchen-related remodeling may exceed new construction next year, with estimates for home remodels and renovations as high as $321 billion by mid-2017. One of the driving forces behind the increase in renovations and remodeling has been the rebounding equity that homeowners have.

With more home-owners choosing to remodel, there has been a larger emphasis on features and design over cost. What are the design trends we are seeing today?

Cabinetry

Wood-based cabinets are still the most common, however there is a variation in the panel type of wood cabinets with 60% of home-owners having a wood finished cabinetry with a raised panel and 25% having a wood finish with a flat panel, 5% are laminate and 10% listed as other.

The most popular color is white with 34%, followed by wood (medium tone) at 20%, gray at 9%, wood (dark tone) at 7% and multi-colored at 6%. Although Zillow recently reported an increase in tuxedo design cabinetry using complimentary colors as an alternative to traditional cabinetry.

Counter Tops

Granite counter tops are overwhelmingly popular with 64% followed by laminate at 14%, engineered stone 9%, solid-surface 9% and other 4%. Of those with granite counter tops three colors choices stand out: 30% of respondents have multi-colored, 26% have white, 18% have black, and 26% reporting other.

Appliances

An overwhelming 79% of respondents prefer stainless steel appliances with only 6% black and 4% white.

Sources:
2016 Annual Builder Practices Report
Houzz
Harvard Joint Center for Housing Studies

U.S. Builder Confidence Surges in September

September 2016

Builder confidence in the market for newly built, single-family homes in September jumped six points to 65 from a revised August reading of 59. This marks the highest HMI level since October 2015 according to the National Association of Home Builders.

All three HMI components rose this month, with current sales conditions rising 6 points to 71 and sales expectations also climbing 5 points to 71. The third component measuring traffic of prospective buyers went up 4 points to 73.

Even with decrease in U.S. housing starts, builders in many markets are confident that the single-family housing market will continue the upward momentum to build throughout the remainder of the year and into 2017.

Derived from a monthly NAHB survey, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good rather than poor.

For more information: NAHB

Canadian Building Permits Inch Upward

September 2016

Municipalities issued building permits worth $6.5 billion in July, a 0.8% increase from the previous month. The advance was largely the result of higher construction for institutional and industrial buildings.
Residential building permits were down 2% to $4 billion in July, the fourth consecutive monthly decrease. In the non-residential sector, the value of building permits increases 5.6% to $2.4 billion. This gain followed two consecutive months of declines.

The Best States for Woodworking

August 2016

“America’s Top States for Business 2016,” compiled by CNBC, ranks the best work states, with the Top 10 in order of: Utah, Texas, Colorado, Minnesota, North Carolina, Washington, Michigan, Georgia, Iowa and Florida. CNBC compiled its list based on 10 categories of competitiveness: Workforce, Cost of Doing Business, Infrastructure, Economy, Quality of Life, Technology & Innovation, Education, Business Friendliness, Cost of Living and Access to Capital.

America’s top States for Business 2016 list has been announced with the top 10 (in order): Utah, Texas, Colorado, Minnesota, North Carolina, Washington, Michigan, Georgia, Iowa, and Florida. Compiled by CNBC, the rankings are based on 10 categories of competitiveness: Workforce, Cost of Doing Business, Infrastructure, Economy, Quality of Life, Technology & Innovation, Education, Business Friendliness, Cost of Living and Access to Capital.

However, CNBC’s ranking does not include some prime states for woodworking. Utilizing data from the Bureau of Labor Statistics, the following is a list of the top 10 woodworking states for furniture, cabinetry and millwork.

Residential furniture and cabinetry top 5 states are: California (with 1,419 shops), Florida (1,074), New York (684), Texas (663), and North Carolina (632). However, based on workforce size the ranking is as follows: North Carolina, California, Mississippi, Texas, and Ohio. Looking at just wood kitchen cabinet and countertop manufacturing facilities California comes in on top with 791 shops, followed by Florida (752), Texas (404), New York (345) and Georgia (341).

For office furniture, fixtures, and millwork shops California yet again ranks number one with 396 shops, followed by New York (279), Illinois (223), North Carolina (199) and Florida (195). Examining the 1,290 architectural woodwork and millwork shops New York ranks number one with 130 shops, followed closely by California (106), Florida (87), Illinois (83) and Texas (76).

Positive Signs for U.S. Housing Market

August 2016

Following the 2008 housing bubble burst, many thought the housing market would never fully recover. However, all signs are pointing towards continued growth and expansion within the U.S. housing market.

According to the U.S. Census Bureau construction spending during the first six months of this year amounted to $539.8 billion, a 6.2% increase over the same time period in 2015. During June 2016, construction spending was estimated at a seasonally adjusted annual rate of $1,133.5 billion where spending on residential construction was at a seasonally adjusted annual rate of $445.8 billion in June.

In addition to an increase in residential construction spending, sales of new single-family houses in June 2016 were at a seasonally adjusted annual rate of 592,000, 3.5% above the revised may rate of 572,000 and 25.4% above the June 2015 estimate of 472,000.

Lumber Production: US & Canada

August 2016

U.S lumber production through May totaled 13.450 billion board feet, a 2.5% increase from the January-May 2015 total according to the Western Wood Products Association. The South had the highest increase in production, up 3.0% over the same time frame in 2015.

In Canada, lumber production in May totaled of 2.378 billion board feet, a 9% increase above the May 2015 number. The year-to-date output is 9% ahead of the 2015 year-to-date pace. Quebec had the highest increase in production with a 16% increase over last year’s pace.