According to a recent report from The Wall Street Journal, the American housing market has taken yet another step toward being a stable sector of the economy. Statistics from the U.S. Commerce Department show that home construction spiked by 16% in July, marking the healthiest period for the previously troubled market since November 2013. In total, housing starts hit 1.093 million homes.
The uptick in building starts should be welcomed with smiles from those in the construction industry, but it isn’t just those directly involved with home construction that are enjoying the benefits of a strengthened housing market. Home improvement chains across the United States have been struggling since 2006 to return to larger profits at more sustainable levels. With the windfall hitting the housing sector, 2014 might finally see that return.
Home Improvement Industry Sees Highest Sales Since 2006
A new report from The Boston Globe details the upward trend in spending. In 2006, the industry was riding high with a record $145 billion in revenue. When the housing bubble popped and the Great Recession hit, home improvement retailers and professionals, from Home Depot to the small town contractor, watched as that revenue shrank. Up until recently, the home improvement industry was pulling in only $57.2 billion a year — that’s 32% of 2006 levels. New data from the Joint Center for Housing Studies at Harvard University shows that by the end of the year, 2014 will usurp 2006 as the most profitable year for the home improvement industry in recent memory.
Despite the news of a recovering housing market only recently breaking, both Lowe’s and Home Depot, arguably the biggest names in home improvement in the U.S., are posting a return to form with renewed income. Home Depot’s overall revenue is up 6%, eclipsing $23 billion for the quarter. Likewise, Lowe’s is enjoying significant spending growth, with a 4.4% increase. Overall, it’s all good news for an industry and a national economy that has received far too little of that for months on end.
Are you confident that this is finally a return to sustainable housing and home improvement markets? Tell us why or why not in the comments.