Is Housing Really Back?

Why That Question Might Be More Complicated Than You Think

As anyone who works in building products can attest, this is not an industry for the weak of heart. The last few years have required everyone—from the manufacturers to the distributors to the dealers to the pros—to weather a lot of ups and downs. As we all know, the economy is now recovering from those difficult times, and so is the building products industry. But the real question on everyone’s minds is simple: is housing really back?

It may seem like a simple question, but the answer is far from it; in fact, the July 2015 Building Products & Construction Industry report from Piper Jaffray offers some important information on this topic:

Residential product manufacturers are up 19.4% over last year
Lumber/wood product manufacturers are down by 11.5% from 2014
Homebuilders have experienced modest growth over last year’s numbers—about 2.8%
Builder confidence and remodeling spending remain positive as of July 2015—an exceptionally good sign for residential product manufacturers

As most in the building products industry can agree, the big number will always be starts. In its heyday, the building products industry was at around 1.5 million starts. As of July 2015, housing starts in the US are up to 1,206,000—the highest since October of 2007.

So the question remains—is housing really back? You’re not likely to find a single answer on this, because a simple, universally agreed upon answer doesn’t exist. There are glimpses of great happenings in the industry including multi-family growth and remodeling growth, but most of us in the building industry agree that getting back to 1.5 million starts isn’t going to happen. Ever. Those times are gone—and maybe that is a good thing. We are back to numbers that are reasonable and—dare I say it—sustainable. The trick is now, as building product marketers, to capitalize on these upward trends to promote further growth.

Here’s a quick digest of relevant articles about the state of housing. Give them a read!