February 13, 2020

Homebuyers Want Upgraded Windows, NAHB Reports

by Erin Johnson

Set in Las Vegas this year, the National Association of Home Builders (NAHB) International Builders’ Show ® is the mecca of the building products world, setting the stage for the year with the latest trends in design, construction and homeownership. Along with that, comes the release of NAHB reports and insights to help us shape our strategies.

With so much new information out there, it can be difficult to find the time to comb through and find the relevant information. In this blog, I’m going to distill it all down to a few key points with the potential impact on our industry:

  1. I’m leading with this one because of its clear meaning to the fenestration industry. Along with walk-in pantries and laundry rooms, low-e windows topped the list of desirable features for buyers. Many are looking for smaller homes, with bigger upgrades—namely ENERGY STAR® windows. There is also a trend toward wood finishes inside and out that add warmth and character to the space.
  1. Green Single-Family and Multifamily Homes 2020 SmartMarket Brief. The standout stat from this report is that 91% of homebuilders use energy-efficient approaches and 69% do so on the majority of their projects. The more builders are implementing energy efficiency and sustainable practices in their designs, the more consumers are coming to expect them. It’s a cycle that will continue to spur the use of green products in the years to come, which is a great sign for our industry. For more insights into this report, see my colleague Ric Jackson’s take on his regular DWM blog.
  1. Millennials Will Dominate the Mortgage Market in 2020. With millennials moving out of cities and into more affordable markets, the NAHB estimates that this generation will account for 50% of mortgage originations in 2020. In terms of location, 34% of millennials looking for homes are focused on the suburbs and 45% are searching in small towns and rural areas. On the flipside, the research shows that boomers are staying put with only 17% saying they are dissatisfied with their current homes. The lesson here? The residential building market needs to continue looking for ways to accommodate the tastes and affordability needs of the millennial generation.
Housing Starts and Remodeling
Of course, understanding the trends is one part of the equation. The overall health of the building and remodeling markets is the other—and both are showing positive numbers heading into 2020. Last year, total housing starts for 2019 were 1.29 million, a 3.2% gain over the 1.25% total from 2018. The NAHB is optimistic about the health of the market with numbers aligning with strong builder sentiment.
On the remodeling side, NAHB predicts that remodeling spending for owner-occupied single-family homes will decrease 0.6% in 2020 and increase 1.2% in 2021, marking a slow but steady growth in the sector over two years.

In summary
All the data points to a positive year ahead filled with opportunities to grow with the changing market. It’s important for us to stay up with the trends and adjust our strategies to remain relevant. The brightest news (in my opinion) is that homebuyers truly value upgraded windows—a good thing for our industry in 2020.

Questions or comments? Email me directly at Erin.Johnson@Quanex.com
 

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Posted: February 13, 2020 by Erin Johnson Filed under: housing, tradeshows, windows