A worsening housing slump, exacerbated by the near-meltdown in the financial arena, as well as declines in consumer and home-builder confidence, continues to hamstring the entire residential construction market, including the kitchen and bath sector. Among the statistics and forecasts released by government agencies, research firms and industry-related trade associations in recent weeks were the following:

Housing Starts

Job losses, continuing problems in the finance sector and sinking home values aggravated by the wave of foreclosures are all contributing factors to a housing decline showing no signs of abating anytime soon, the National Association of Home Builders said last month. “Traffic of prospective buyers is down substantially, and consumer confidence is very low,” said NAHB Chief Economist David Seiders in the wake of reports of worsening conditions in the nation’s housing and financial markets, and continued declines in housing starts. Starts of new single-family homes fell in June to their slowest pace in 17 years, marking a decline of 64.5% from the peak of the building boom in January of 2006, according to the Washington, DC-based NAHB. Builder confidence was also reported at an all-time low.

Existing-Home Sales

Modest near-term movement is expected in existing-home sales, with a recovery in sales seen during the second half of the year, according to the latest forecast by the National Association of Realtors. According to the latest forecast of the Washington, DC-based NAR, existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter of 2008 to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million units, and then increase 5% next year to 5.58 million units, the NAR projected. “The speed at which home prices has declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market,” observed NAR chief economist Lawrence Yun. “It’s possible that most of the price declines have already occurred in those markets.” The aggregate median existing-home price is projected to fall 6.2% this year, to $205,300, and then rise by 4.3% in 2009, to $214,100, according to the NAR.

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