Page 32 - Lighting Magazine January 2019

2019 Forecast
“Rates of new home construction and renovation are anticipated to grow between 5 and 7 percent annually through 2019.”
30 enLIGHTenment MagazIne | January 2019
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home construction may increase, a look on the buy-side is equally important. Like NAHB, Core- Logic Chief Economist Frank Notha also expects mortgage interest rates and home prices to mod- erately increase, which in turn will lessen housing a ordability.
“Higher rates are not just a gradual erosion of a ordability, but also impact owner mobility,” No- tha says. “That has implications on the overall inventory for sale. Supply has been tight and for- sale inventory will continue to remain tight.”
Tight inventory in the housing market will cause home and rental pricing to increase and outpace in ation, according to Notha , who expects na- tionwide home prices to rise approximately 5 percent and rental properties to be up 3 percent in 2019.
The biggest growth areas for these new home sales are the South and West, where many of these metro areas have positive job growth, be er af- fordability, and good weather. Notha points out seven major markets that will particularly bene t:
8 Houston
8 Dallas
8 SanAntonio 8 Austin
8 Phoenix
8 Atlanta
8 Charlo e
wHAt AboUt remodeling?
Beyond new home sales, there is also much to consider in the remodeling category. According to new research and a recent report from the Na- tional Kitchen and Bath Association (NKBA), the remodeling of American kitchens and bathrooms is an annual $31-billion industry — which equates to about 25 percent of the overall $121 billion U.S. remodeling market.
On this front, NAHB is posting strong market conditions, partly because of the signi cant dam- age that typically follows the hurricane and wild re seasons. While these are extremely unfortunate situations, they are a reality and our industry is one that has the opportunity to help people rebuild their homes and lives.
As of press time, residential remodeling activ- ity was expected to register a 7-percent gain by the end of 2018 over the previous year. NAHB predicts that remodeling spending for owner- occupied, single-family homes will have increased 4.9 percent in 2018 over 2017 with an additional 0.6 percent expected in 2019. While this is not a huge increase, it is an increase nonetheless.
According to the much-lauded and comprehen- sive NKBA Size of the Industry Report, homeowners remodel approximately 1.8 million kitchens and 2.5 million bathrooms each year.
The Report emphasizes the importance of fol- lowing annual new home construction gures, citing that annual new home construction adds roughly 1.2 million kitchens and 2.8 million bath- rooms to the marketplace. An increase in one will create an increase in the other.
Other ndings include:
8 Rates of new home construction and
renovation are anticipated to grow between
5 and 7 percent annually through 2019. 8 Residential construction and remodeling
continue to outpace the commercial sector, as well as the residential repair market. Overall, commercial construction continues to dwarf its residential counterpart.
8 Year-over-year growth in the multi-family housing construction market is expected to be surpassed by single-family construction in 2018 and continue through 2019.