The shape of the housing market may be as important as any other factor for companies in the home furnishings business, especially in lighting. Both new home construction and home remodeling play big roles in purchases and while household formation numbers are even more important (they show the level of new households being created which drives business even more), housing is critical.
So understanding what’s likely to happen in housing in 2020 is quite useful in business planning. The National Association of Realtors is forecasting a continued expansion of the overall economy for the new year with good strength in the housing market driven by low mortgage rates and modest increases in home pricing.
Zillow, the real estate search service, is also projecting a continuation of the current economy this year although it does warn that “the threat to the economy from trade volatility is real.” Its research also sees the ongoing shrinkage of the new American home, something it says began in 2016. While noting homes are still a third larger than 30 years ago, the average size has dropped from 2,467 square feet to 2,386 square feet over the past few years.
Zillow also weighed in on home design trends, saying it expects color to make a comeback in the form of “bold prints, lively wallpaper and brightly hued walls.” It specifically references home products when it comes to this trend: “Look for color to be injected in unexpected ways in kitchen cabinetry and appliances, in lighting fixtures and on interior doors and moldings.”
Finally, the National Association of Home Builders reports homebuilder confidence jumped to its highest level in 20 years in December.
Putting it all together, it looks like a positive – very positive – outlook for housing in this new year, good news for the home furnishings business.