A combination of unsold inventory and correcting market prices are going to keep starts and home sales weak for pretty much the rest of 2008, it appears.
Somewhat counter-intuitively, this creates an opportunity for kitchen and bath firms. Kitchens and baths drive home sales, both for existing homes and new offerings. They generally are the rooms that homebuyers look at first, and on which they base their purchasing decisions.
The most recent start numbers from the Census Bureau put starts for April on a pace for 1.53 million units, down about 16% from April 2006.
Building permits in April, though, dipped to an annualized pace of just 1.428 million units, down a whopping 28% from the same month last year.
April new home sales jumped to an annualized rate of 981,000 units. The figure was almost universally reported as a gain, which it is compared to March's pace. But compared to April, 2006, it's off by almost 11%.
And existing home sales for the month have dipped about 11% year to year to a rate of 5.99 million units per year, according to the National Association of Realtors, which blamed the slowdown on tightening lending pracitices, including fewer subprime mortgages.