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Wednesday, February 11, 2004 After a record-breaking 2003, home builders anticipate a prosperous 2004 By Mac McKinney,
President As we look forward to 2004, builders and homeowners across the country can reflect on 2003, a banner year for the home building and remodeling industry. Home sales and consumer spending were the linchpins for the economy when growth slowed in late 2002 and early 2003, and a strong finish to what was a record-breaking year for home sales bodes well for 2004. Single family homes sold briskly throughout 2003, and the National Association of Home Builders expects that once all of the data is tabulated, sales of new single-family homes will top more than one million units in 2003, a gain of 11 percent from the 2002 record of 977,000 sales, largely thanks to favorable mortgage rates and solid gains in house values. Single-family housing starts in 2003 likely will break another record, if the total exceeds 1.84 million units as anticipated. However, the year’s gains were not limited to single-family homes. According to a report released by NAHB in November, sales of new and existing condominiums jumped almost 13 percent during the first nine months of 2003 and that upward trend is expected to continue. Professional remodelers also continued to enjoy strong demand for their services in 2003, due to many of the same factors that bolstered new-home sales, including low interest rates and rising home values. In 2004, home building is expected to remain a strong contributor to the U.S. economy. Many indications point to a continuously solid housing market; mortgage rates in the 6-percent range, increasing consumer confidence and impressive house-price performance likely will continue to work together to support the housing industry throughout the new year. What exactly does this mean for consumers? First of all, the housing boom spells good things ahead for the economy as a whole. An economic powerhouse, the housing industry is estimated to account for a robust 14 percent of the country’s overall GDP, creating millions of jobs and generating billions of dollars in tax revenue each year. Additionally, a spike in the production of new homes encourages consumer spending on related items, such as appliances, furnishings, home décor and home improvements. Also, the strong new-homes market offers an ongoing opportunity for more Americans to achieve the dream of homeownership. A substantial influx of immigrants, along with the growing importance of minorities and ‘echo boomers’ (the children of baby boomers) can boost the share of housing production targeted to entry-level buyers. The future of the housing industry is bright. (Mac McKinney, who is owner and president of McKinney Builders Inc., is president of the Home Builders Association of Midwest Georgia, which serves a membership of approximately 550 builders and associate members in Fayette, Coweta, Spalding, Meriwether, Heard, Pike, Upson, Lamar, Butts and Jasper counties.)
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