Positive Outlooks Reported for Single-Family, Multi-Family and Remodeling Efforts

September 27th, 2022 by Travis Rains

The Fenestration and Glazing Industry Alliance (FGIA) Hybrid Fall Conference continued on Tuesday, Sept. 27 with Michael Collins of EquiNova Capital Partners LLC, updating attendees on the construction and remodeling outlook for 2022. While the National Association of Home Builders (NAHB) projects decreases in single-family housing starts in the years to come, Collins says those who are “getting after it” are likely to find that the market is “strong and pretty busy.”

When COVID-19 hit in 2020, it resulted in a strong performance for single-family housing starts as people sought additional space. Collins says that trend continued into 2021, which also saw a “very strong” market. But for 2022, NAHB projects a 13% decrease in the single-family market.

“I was really surprised by that number because everybody we’re talking to is running just as strong and has as big of a backlog as they’ve had in years,” Collins says, noting that an additional 8% decrease is projected for 2023. “But, again, I think it’s going to be the kind of year that for the people in the industry who are out there getting after it, it’s not going to feel like we’ve had two malaise years in a row. I think it’s going to feel like it does now, which is pretty strong and pretty busy.”

In 2024, the single-family market could see activity in league with a few years ago with more than a million homes constructed.

Collins also addressed the state of multi-family construction. 2022, he says, has been a great year for multi-family construction because of rising interest rates and increased lumber prices. Collins says people don’t want to get less home for their money with the increased price of lumber. Those factors have resulted in potential home buyers opting for multi-family living as they wait to see what happens with rates and prices in the years to come.

While lumber prices are currently lower than they’ve been in 18 months to two years, rising interest rates remain a factor. Therefore, multi-family construction is projected to continue to do well.

“We’re so spoiled by strong growth that when we see slower growth we tend to grumble,” Collins says of the classic growth at a slower rate projected for residential remodeling. “But residential remodeling this year will grow 7%, and is projected to grow 6% and then 4% in the next two years.”

And homeowners are also spending more for their remodeling efforts.

“Homeowners that have made the decision to stay put are now throwing money at remodeling. Whether it’s overhead doors or windows and doors, they’re willing to pay a lot of money to have things just the way they want,” Collins says. “When they know they’re going to stay put and it’s a longer-term investment for them, they’re paying up. I’m confident that’s what’s driving a lot of these remodeling numbers.”

Collins’ presentation also covered the macroeconomic backdrop including possible recession considerations, key trends affecting the industry, and the state of mergers and acquisitions. Stay tuned for further coverage of not only Collins’ report but upcoming FGIA seminars through Wednesday, Sept. 28.

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