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Big Jump in Housing Starts in December
CHARLOTTE, NORTH CAROLINA
From the Wells Fargo Economics Group
Ending 2012 on a solid note, housing starts rose a more-than-expected 12.1 percent in December to a 954,000-unit pace, the fastest rate in four years. Single-family starts rose 8.1 percent to a 616,000-unit pace in December and are up 18.5 percent over the past year. The volatile multifamily component increased a solid 20.3 percent.
Starts rose in every region. Starts were revised generally lower in November, but the overall report is somewhat too good to be true. We suspect some of the surge is likely seasonal noise, but it's also plausible that builders were trying to get ahead of higher permitting fees and other new regulations scheduled to take place in the beginning of 2013.
While the bump in starts appears a bit exaggerated, the trend is still upward. Starts finished the year 37 percent higher than its year-ago pace and are expected to be even stronger in 2013.
One sign pointing to continued momentum in housing construction in 2013 is permits. Housing permits rose 0.3 percent in December to a 903,000-unit pace. Single-family permits are up roughly 27 percent on a year-ago basis suggesting it will likely be a bright spot during the year with overall growth heavily weighted toward single-family homes.
Multifamily permits fell 2.1 percent on the month and have been down two of the past three months. Demand for apartments is showing little signs of abating, but construction pipelines are fairly robust in select markets.
Another bright spot to watch is builder sentiment. The latest NAHB/Wells Fargo Home Builders survey was unchanged in January at 47, the highest level since 2006. The strength in builder sentiment continues to reflect gains in sales and buyer traffic. So why are builders optimistic?
The improvement in builder optimism is largely due to continued gains in prices and historically low inventories. While the share of foreclosures remains elevated, competition from foreclosures has lessened considerably over the past year as properties in the best condition have already been sold.
The Outlook for Housing Starts We expect starts will increase to a sustainable pace of roughly 990,000-units in 2013 with much of the gains in single-family. Despite some monthly volatility, all price measures are improving which should encourage more single-family activity as the labor market continues to strengthen.
With single-family gaining solid footing, multifamily will likely begin to stabilize. We believe the trend toward multifamily housing will continue, but starts should see a peak in the next few years. That said, the housing market will likely continue to be a bright spot for the U.S. economy over 2013 with real residential construction continuing to add to real GDP growth. |
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Remodeling Recovery
Underway and Picking Up Steam
CAMBRIDGE, MASSACHUSETTS
All signs point to a strong rebound for home improvement activity in 2013, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Robust spending in the second half of 2012 suggests the remodeling recovery is already underway, and the LIRA projects annual homeowner improvement spending will see accelerating double-digit growth through the third quarter of 2013. "It's encouraging to see the residential sector finally contribute to growth in our economy," says Eric S. Belsky, managing director of the Joint Center. "Through the first three quarters of 2012, investment in the residential sector was responsible for one out of every six dollars added to our GDP. Moving forward, home improvement spending is expected to make an even larger contribution to GDP growth." "There are many external economic and political risks that could derail this remodeling recovery," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "However, the solid momentum behind home building activity, existing home sales, low financing costs and remodeling contractor sentiment all point to a solid start to the new year for home improvement spending."  The Leading Indicator of Remodeling Activity (LIRA) is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry. The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter's closing. The next LIRA release date is April 18, 2013. The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry. Press release with full size graphic available at the website.
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Capel Releases
Best Catalog Yet: "The Guide"
TROY, NORTH CAROLINA
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The Guide.
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Capel Rugs is proud to announce the release of its sophisticated 2013 catalog "The Guide."
Filled with 240 inspiring and engaging pages, "The Guide" encourages readers to be their own interior decorators by providing creative ideas for mix-and-match patterns and helpful information about each featured piece. Readers can browse rugs by room, collection, rug construction, texture, designer and color in this easy-to-use showcase of Capel's premier designs.
The catalog also features the amazing work of Capel's stellar team of famous designers and brands, including Genevieve Gorder Rugs, Biltmore Rugs, Kevin O'Brien Rugs and Williamsburg Rugs. Known as a fashion-forward style leader, Capel's designer line includes an eclectic range of looks, motifs and textures to fit every taste and home style.
Since many Capel products bear the Made in the USA seal, "The Guide" also provides plenty of attractive options for consumers aiming to enhance the ambiance of their classic American homes.
Capel's new catalog was introduced at this month's Atlanta International Area Rug Market and is now being mailed out to 10,000 dealers nationwide.
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KitchenAid Partners With Nexgrill Industries on New Grill Collection
ORLANDO, FLORIDA
KitchenAid, the brand that has been providing cooks with high performance appliances for almost a century, has partnered with Nexgrill Industries to introduce a new collection of powerful freestanding and built-in grills designed not only to deliver exceptional grilling but also to withstand the wear and tear of the outdoors.
The new collection will be unveiled in the Nexgrill display at booth 3003 at this year's Hearth, Patio & Barbecue (HPB) Expo in Orlando, taking place from March 13-16.
"Nexgrill Industries is one of the world's finest manufacturers of grills and we're excited to collaborate with them to offer an outdoor collection that delivers both the powerful cooking performance and durability the KitchenAid brand is known for," says Beth Robinson, senior brand experience manager for KitchenAid.
"We're confident that specialty retailers at this year's show will be impressed with the quality and value our new grills can deliver to their customers."
Designed with Even-Heat Technology, all KitchenAid grills feature powerful stainless-steel burners, angled flame-tamers and enhanced grates for consistent heat over the entire grill surface with minimal flare-ups. Constructed with 304 stainless steel, the grill industry's highest corrosion-resistant material, they are impermeable to harsh elements and easy to clean.
Additional features include a built-in thermometer on the grill lid's exterior for gauging internal grill temperatures and side shelves on freestanding models for placing items like utensils or foods to be grilled.
Learn why chefs choose KitchenAid for their homes more than any other brand.
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