Collins The Trend Tracker
by Mike Collins
September 22nd, 2016

Pulse Points on the Industry

It would not be an exaggeration to say that we are constantly on the lookout for signs of the continuing health of the door and window and larger building products industry. LendingTree recently released such a positive statistic, with its report showing that average down payments on home purchases with a conventional 30-year mortgage rose to 17.1 percent. That says a lot of positive things about the industry.

First of all, it’s great that home buyers can afford that down payment. It’s also great that lenders are requiring it. Without question, the last downturn would have been less severe if lenders had required a prudent level of down payments from home buyers. Larger down payments mean that buyers are real home owners and not speculators counting on flipping a house or withdrawing equity in a short period of time.

Builders who, a few years ago, were grumbling that they couldn’t get construction loans are now stymied more by labor and lot shortages. Both of those are problems, but they’re relatively elegant problems to have. In both cases, prices will have a tendency to increase – hourly wages and lot values – but that is how the market ensures that resources find their way into the best capitalized hands to take advantage of them. Companies are now picking up some workers laid off from the energy industry due to low prevailing oil prices. On the building lot side, architects and designers step in and create house plans that allow a builder to use a lot that may have an odd shape or be somewhat narrower than is optimal.

A final thought would be to remind door and window manufacturers to continue to have a prudent emphasis on single-family remodeling. It’s easy to get caught up in the great feeling of a win in the form of a 1,000-unit multi-family project or a builder that has given you a verbal on using your products in 500 homes this year. When the market does eventually soften again, as it will, the remodeling industry will pick up a stronger tailwind, and activity there will increase. It’s best to build relationships with customers that will allow you to serve both segments to reduce the cyclicality of your door or window business.

This blog is from Door and Window Market [DWM] magazine's free e-newsletter that covers the latest door and window industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to [DWM] magazine in print or digital format are available. Subscribe at no charge HERE.

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