Market Briefing

  • US Economy
  • Housing
  • Power Tool Industry
  • Distribution
  • Canada
  • Market Trends
  • PDF
  • US Economy
  • Housing
  • Power Tool Industry
  • Distribution
  • Canada
  • Market Trends
  • PDF

Market Trends

Market Trends October 2022

10/14/2022

 
Housing Market Trends
The median home sale price hit $433,100 at the beginning of 2022, up from $329,000 at the start of 2020. Just 43% of the homes sold in the second quarter of 2022 were within the budget of a family earning the median income of $90,000 per year, according to the National Association of Home Builders. The median down payment was $35,000 in the second quarter of 2022, up almost 35% from the previous quarter, according to ATTOM, a real estate market data firm.
 
Zillow says that’s it’s practically impossible to predict where home prices will be ten years from now, but they believe that going forward home price growth will be much closer to historical norms of 3% to 5% annually rather than the record pandemic-induced pace we’ve seen over the past two years. No one believes we’re going to see a big decline in home prices.
 
Home values leveled off over the summer as buyers pulled back, rebelling at higher prices and rising mortgage rates. Analysts caution that pent-up demand will keep prices from falling to anywhere near pre-pandemic levels as people have come to acknowledge the new normal. Price drops are likely to be short-lived and minimal unless there is a big increase in inventory.
 
Home builders are unlikely to adopt a “build it and they will buy it” mentality; that attitude and loose lending standards were partially behind the big housing crash in 2008. Mortgage lenders now have much higher standards for loaning money. Nevertheless, the housing shortage is a real issue that is going to take a long time to fix.
 
Buyers are beginning to get a bit more bargaining power and are now able to come in under ask in some markets and negotiate prices and concessions. However, with higher mortgage rates, the median mortgage payment is nearly 40% higher than it was just a year ago. Rates have risen from 3% at the end of 2021 to pushing 6% at the end of September and there is no real end to the rate hikes in sight for the immediate future.
 
Housing analysts do not anticipate a market crash; at most, a correction that will bring price appreciation more closely in line with historic standards.
 
The average cost to build a home is just over $282,000, according to HomeAdvisor, but volatile supply costs have made predicting the cost of building a home especially challenging over the past two years. That’s just the house; people need to buy the land and account for infrastructure needs as well. The average house took 8.2 months to finish in 2021, according to the Census Bureau.
 
The average rate of inflation over the last 10 years is 2.53%, according to the Consumer Price Index. In the past two years, though, inflation has soared at a rate of 4.7% in 2021 and 8.6% percent so far in 2022.
 
Boomerang Employees Come Back
The Great Resignation is turning into the Great Return. More than 400,000 people quit their jobs over the past two years, hoping for a better job, more flexibility, better pay and hours and more satisfaction. But a recent survey shows that more than half of them report that their new path has not met their expectations. Job jumpers moved to new careers that may have paid more but the jobs turned out to be less fulfilling or more demanding. Now one-third of all new hires are boomerangers who have decided the grass was pretty green where they were formerly planted. Some companies are luring employees back with better benefits, more pay and perks. Employees and employers may have both learned lessons from the very tight job market and high mobility created by the pandemic.
 
White House Economic Forecast
The White House recently released an updated forecast for the US economy that foresees slower economic growth and significantly higher inflation than previously forecast. Consumer prices are expected to rise 6.6% this year, 2.8% in 2023 and 2.3% in 2024. Real US GDP growth will be 1.4% in 2022, 1.8% in 2023 and 2.0% in 2024.Unemployment will average 3.7% in 2022, 3.7% in 2023, and 3.8% in 2024.
Product Packaging Under Scrutiny
Product packaging has been under the microscope for almost a decade as people search for greener and more recyclable options with smaller footprints. Greg Fornasiero, Director of Packaging Engineering at The Home Depot, recently discussed what they are doing to improve packaging and make it more sustainable.
 
The Home Depot focuses on performance, value and sustainability. The bulk of their focus is on making sure packaging performs as expected. They test all new product packaging to make sure it can get safely through the supply chain to a customer's home or work site and send the packaging through ISTA (International Safe Transit Association) testing, drop testing, vibration testing and compression testing.
 
They question every aspect of packaging with an eye to how it performs and meets expectations, and how it can be improved. The right packaging does a better job of protecting products, cutting down on shipping space and costs and reducing the supply chain’s carbon footprint.
 
The Home Depot has pledged to exclude expanded polystyrene (EPS) foam and polyvinyl chloride (PVC) film from private label packaging by the end of 2023. Fornasiero team is responsible for ensuring that pledge is met by securing alternative materials that perform as well and don’t cost more. Sometimes they can find ways to make packages smaller in ways shoppers don’t even notice but make an enormous impact overall.
 
CHIPS Act Provides $39 Billion for Construction and Supports US Chipmakers
President Biden recently signed the CHIPS act into law. The legislation will provide $39 billion towards the construction of plants in the US that manufacture the microchips that are vital component to everything from automobiles to smart phones. There are also tax breaks for chipmakers and billions of dollars more for research. The bill was widely supported by various industry groups. 
NExt Section
​© Robert Bosch Tool Corporation.  All rights reserved, no copying or reproducing is permitted without prior written approval.

Comments are closed.


    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016

    Picture
    Picture
    Picture
    Picture
    Picture
    Picture
    Picture


    ​Contact US

Powered by Create your own unique website with customizable templates.