2020 is a year that will go down in history as transformative in a number of ways. The pandemic shaped and evolved industries throughout the world in ways that will be felt for generations. At the WDMA 2020 Fall Conference, Ali Wolf, Chief Economist for Zonda presented research findings on the current state of the residential and remodel market and looked into next year and beyond. As head of the Economics Department, she manages and analyzes the content for Zonda, provides data analytics, runs special research projects, and does presentations across the country on topics spanning both the housing market and the wider economy.
One of the first takeaways is that analysts were surprised by two major factors. First, how uneven the economic recovery has been and second, how even the housing recovery has been in terms of new and existing homes. Different markets are being impacted in different ways. In a recession, normally the services industry stays strong while the goods sector slumps, but this time, as people have stayed home more, the opposite has happened—people are buying things. This is due, in no small part, to the stimulus package. It proved, to be one of the greatest aids to the market because it did what it was supposed to do, which was helping keep the economy going while job losses were spiking around the country.
Wolf said Americans are wanting to spend this money. They are buying cars because they don’t want (or aren’t allowed) to fly and financing is extremely low. What’s more, people are buying houses and remodeling the ones they are in. The reasons behind this are many fold, but demand for home sales are up 40% year-over-year. This is creating a number of factors that are both good and bad for builders. On the good side, there is a limited resale supply, low mortgage rates, an expanded buyer pool with work-from-home and school-at-home situations, COVID-19 is motivating renters to find something more stable and millennials are moving to the suburbs. As a result, builder confidence has never been higher. But that said, there are some challenges with this particular hot market. For instance, there is a lack of new home inventory, land is in limited supply and is increasing in costs, permits are being delayed, supply lines have been disrupted, which has caused delays in finishing projects on time because builders getting the necessary windows, doors and lumber. Builders are also raising prices significantly—but people are still buying homes.
LOOKING FORWARD
As builders feel confidence, they will continue to build homes, which is great for the window and door market. There are still a lot of unknowns for the next year, but Wolf says one thing that is known for certain is there are a lot of homes that are sold and under contract, but the home is not yet started. That will lead to an increase in starts in 2020 just to backfill the homes that are already sold, plus she expects to see additional sales and starts into the first half of the year.
Michael O’Brien
President and CEO, WDMA
WDMA Fall Conference Online Streaming
If you didn’t get a chance to join us for the WDMA 2020 Virtual Fall Conference, you can now access the entire program on-demand. The two-day event featured forecasts for all aspects of the residential, remodeling, multifamily and commercial markets, as well as the window and door demand, and contractor sentiment. Plus, your leadership team can view the sessions addressing resiliency, unconscious bias and the “science” of success.
Access to view all archived conference sessions upon purchase will be provided through December 20, 2020 here.
Webinar: Understanding Window, Door & Skylight Certification
Understand the benefits of window, door and skylight certification and how certified products can enhance your projects.
Webinar: Understanding Window, Door & Skylight Certification
The Understanding Window, Door & Skylight Certification webinar is designed to help architects and remodelers understand the benefits of window, door and skylight certification and how certified products can enhance their projects.
