The housing rebound continues, but its effect hasn’t been evenly distributed across the spectrum of housing types and price points. In 2006, multifamily represented only 16% of residential starts but surged to 35% of starts in 2015, bringing a new character to the market for home building materials. In 2016, however, multifamily began inching its way back down from its peak the year before.
Monitoring this evolving mix is key in predicting where the market is going. Home Innovation’s “2017 Builder Practices Survey” captured many new trends and trend reversals.
Overall, there is a movement toward the middle price points in the market. This is shown by a reduction in the share of luxury homes, whose average cost/selling price in 2016 was highest ($500,000); as well as a reduction in the share of multifamily housing, whose average cost/selling price per unit is the lowest among all categories ($150,000). In contrast, the share of single-family detached (SFD) move-up homes saw the sharpest increase. SFD starter homes and townhouses (SF attached) also saw moderate increases in market share.
As for building materials, one might expect high-end and low-end materials to be most significantly (and negatively)
impacted by this market shift. The survey found this to be true in some cases. Some products affected by the shift include:
- Jetted tubs were installed in about 15% of new homes in 2015, but fell to about 11% in 2016.
- Shares for natural granite and marble shower and bathtub surrounds fell from 12% to 9% in the past year.
- High-end enameled cast iron and granite sinks lost share, while lower- to mid-range vitreous china and enameled steel sinks both saw a boost.
- One-piece cultured marble sinks and countertops, at the lowest end of the cost spectrum, tumbled from 24% to 18% over the same time period.
- High-end solid hardwood and luxury vinyl tile for kitchen floors held steady, while engineered hardwood and ceramic tile each grew 3 percentage points in market share.
- Natural stone (marble, slate, and granite) fell from 6% to 3% share.
- Vinyl sheet flooring, most used in multifamily homes, fell from 12% to 8%.
The “movement to the middle” characterization of the new market seems to hold well except for countertops. Quartz countertops, despite being among the most expensive products in the category, had their best year in new homes—growing from 9% to 13% in bathrooms, and from 9% to 15% in kitchens. The movement also had conflicting impacts on faucet finishes. For the first time in survey history, nickel-finished faucets were the most popular finish in kitchens, outselling stainless steel, chrome, bronze, and others. In the bathroom, nickel gained ground at the expense of all other major categories except for chrome, which narrowly hung on to its top position.
This is just a glimpse of how the housing shift is affecting various building product categories. For help figuring out how to best position your product for today’s housing mix, visit HomeInnovation.com.
