WASHINGTON, DC — Ongoing global supply-chain disruptions coupled with the prospect of higher interest rates threaten to exacerbate affordability problems for both new and existing homes in the months ahead, the National Association of Home Builders said last month.
Housing affordability, according to the latest figures released by the NAHB, held steady at its lowest level in nearly a decade, as record-high home prices offset lower mortgage rates to keep the affordability rate flat in the third quarter of 2021.
“Persistent building material supply chain bottlenecks and tariffs on Canadian lumber and Chinese steel and aluminum continue to place upward pressure on construction costs and home prices,” even in the face of continued high demand,” said Chuck Fowke, chairman of the Washington, DC-based NAHB.
Moreover, according to NAHB Chief Economist Robert Dietz, interest rates are anticipated to gradually rise in the coming months, as the Federal Reserve begins to taper its monthly bond and mortgage-backed securities purchases.
“To keep affordability problems from worsening, policymakers need to tackle supply-chain challenges that are disrupting and delaying construction projects and hurting housing affordability,” Dietz said. “Helping builders boost output will also slow the rapid rise in home prices that has occurred over the past year.”
In addition to concerns over building materials and the national supply chain, labor and building lot access are key constraints for housing supply, according to Dietz. “Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions,” Dietz said. “Policymakers need to focus on resolving these issues to help builders produce more housing to meet strong market demand.”
In related news:
n Low existing inventories and strong buyer demand helped push builder confidence higher for the third consecutive month even as supply-side challenges – including building material bottlenecks and lot and labor shortages – remain stubbornly persistent, the NAHB said, noting that as a result of supply-chain effects, there are 152,000 single-family units – up 43.4% from a year ago – that have been authorized for construction but are awaiting a go-ahead.
n Single-family housing production lagged in October due to supply-chain effects for materials and ongoing access issues for labor and lots. Overall housing starts decreased 0.7% to a seasonally adjusted annual rate of 1.52 million units, according to the U.S. Dept. of Housing and Urban Development and the U.S. Census Bureau.
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HACKETTSTOWN, NJ — Millennial clients – particularly those with children – are increasing in influence while the impact of Baby Boomer clients is gradually declining and Gen X is remaining constant, according to a 2022 Design Trends Forecast released this week by the National Kitchen & Bath Association.
The NKBA’s annual design trends forecast points to a gradual, yet palpable, shift in the primary customer base for new and remodeled kitchens and baths, after several decades in which the market was driven largely by a huge cohort of Baby Boomers (aged 57-75) and Gen Xers (aged 41-56) consumers.
While baby boom and Gen-X consumers remain the industry’s predominant buying force, the steady increase in business from Millennial clients (ages 25-40) is increasingly impacting both market share and anticipated kitchen and bath design trends, according to the NKBA, which said Millennials’ impact has “a high probability of increasing in the future.”
“Those working with Millennials see slightly less-expensive projects, but that’s likely driven by Millennials’ lower disposable income during their current life stage,” said the NKBA, whose 2022 Design Trends Forecast was based on a survey of approximately 650 designers, dealers, and other design professionals. The survey’s aim was to identify styles, features and materials that are expected to be more popular in the next several years; to identify the products that have the most dramatic impact on today’s kitchens and bathrooms; to assess if there are notable variations in designer client base profiles; and to predict if client base profiles are predictors of perceived design trends.
Among the overarching themes emerging from the NKBA’s 2022 survey is that kitchen clients generally want flex space for work, touchless fixtures, easy-to-clean surfaces, outdoor living areas, LED lighting and recycling storage. There is also a concerted desire for mobile-friendly spaces, healthy cooking, app-controlled appliances and voice-activated lighting, the NKBA said.
In the bathroom, consumers want a large shower, and are likely to remove tubs in order to allocate more space or access to storage/dressing areas, the NKBA said. There is also a pronounced need for energy and water efficiency, connected products such as water temperature controls, entertainment and communication, the association added.
In general, new kitchen and bathroom design is emerging from nature-inspired themes, the NKBA reported. “Organic, natural styles are prominent in both kitchens and bathrooms, especially among Millennials, (and) increased natural light with large, high-performance windows and doors for outdoor access will be prominent,” the NKBA said.
“Homeowners have a desire for spaces that can multi-function,” the NKBA observed, pointing to a growing trend toward large islands for food prep that also function as dining tables, homework and work from home; flexible space for home office activities; pantries that include space for storage and a working area for small appliances; and workstation sinks with built-in features (drying racks, cutting boards, etc.) In addition, bathrooms that connect to dressing areas and/or laundry facilities, and vanities and medicine cabinets with outlets are also experiencing increased popularity.
When designing new spaces, homeowners are generally thinking about the following:
n Cleanliness: easy-to-clean surfaces and countertops that are sanitary and non-porous. The current strong demand for quartz is expected to continue, as is the popularity of larger-format tile or slabs with less grout, and touchless faucets.
n Sustainable design: 100% LED lighting; a dedicated recycling area; low-E windows and doors; Energy star/efficient products; EPA WaterSense fixtures; VOC-free paint; products with recycled materials, and radiant flooring.
n Universal design: spaces that will allow for aging in place; curb-less showers; fewer free-standing tubs, grab bars, seats in showers and hand-held showerheads.
Although homeowners are excited about integrated technology, it is not being utilized in most projects. Specifically, only 30% and 21% of kitchen and bath projects, respectively, include integrated technology features, the NKBA reported.
“Designers have new ways to interact with their clients, especially Millennials,” the NKBA said. “Future design projects will include a mix of in-person and virtual meetings. In-person meetings both in designer’s offices and at the client’s home will be most prominent.
“Designers will (also) take advantage of virtual channels with video calls and video meetings with clients,” NKBA researchers added. “Millennials are more open to virtual meetings while Boomers are looking for regular onsite meetings at their home.”
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