About josephlundgrenconsulting

Joe is a globally recognized product and marketing expert in the ceramic and stone worldwide markets. His specialty is Business Development, Product Management, and Marketing. He has developed his expertise in strategic planning, new product development and marketing strategy during his twenty-seven year career at Dal-Tile, a subsidiary of Mohawk Industries.

In the news : Home builder sentiment slides as old worries plague construction industry

A construction worker works on a new home for developer KB Home in Valencia, California.

The numbers: U.S. home builder confidence fell two points to 64 in June, as measured by the National Association of Home Builders’ index. That missed the consensus forecast of a one-point increase.

Any reading over 50 signals improvement.

NAHB builder sentiment

Seasonally adjusted


What happened: Home builder confidence slid throughout 2018 as the housing outlook darkened, but seemed to be perking up, along with the broader market, earlier this year.

In June, the gauge of current sales conditions dipped one point to 71, the tracker of sales expectations over the coming six months fell two points to 70, and views of buyer traffic declined to 48 from 49.

Big picture: Economists have historically looked to NAHB’s index for clues on the future pace of home construction. But that relationship has broken down in the aftermath of the housing bust following the 2008 financial crisis. Builders have been reasonably confident, but have started far fewer homes than in previous points in history. In fact, consumer demand for homes is so robust that sentiment and construction should both be much higher.

The sub-gauge of buyer traffic has been higher during this cycle than during the housing bubble years, even as sustained lower-than-normal levels of construction have left us with a shortfall of several million homes, according to some economist estimates. (More on the buyer traffic conundrum can be found here.)

What they’re saying: NAHB and other industry groups have for years blamed a number of headwinds for lackluster sentiment and tepid pace of building: the cost of labor and land, primarily. When the Trump administration started to flex its trade policy muscles, the industry added the cost of lumber, inflated by tariffs, to that list. On Monday, the group also called out “excessive regulations” for the downturn in confidence.

Still, pent-up demand for new homes prompted analysts at Wedbush to upgrade their view of homebuilder stocks last week.

Market reaction: They’re not the only ones convinced that builder stocks are a good buy. Investors have sent shares of LGI Homes Inc. LGIH, -0.88%   more than 60% higher since the start of the year, and shares of KB Home KBH, -1.83%   nearly 39% higher in that period.

Read more here.


Happy Father’s Day


Dependable. Supportive. Steadfast… Does ‘Dad’ come to mind? Ceramic tile also shares those qualities, making it strong enough to last a lifetime. Happy Father’s Day to all
the #1 Dads.

#HappyFathersDay #WhyTile #strong #dependable

Read more here.

Surveys of Consumers – University of Michigan

Preliminary Results for June 2019
Jun May Jun M-M Y-Y
2019 2019 2018 Change Change
Index of Consumer Sentiment 97.9 100.0 98.2 -2.1% -0.3%
Current Economic Conditions 112.5 110.0 116.5 +2.3% -3.4%
Index of Consumer Expectations 88.6 93.5 86.3 -5.2% +2.7%
Next data release: Friday, June 28, 2019 for Final June data at 10am ET
Surveys of Consumers chief economist, Richard Curtin
In early June, consumer sentiment reversed the May gain due to tariffs as well as slowing gains in employment. Some of the decline was due to expected tariffs on Mexican imports, which may be reversed in late June, but most of the concern was with the 25% tariffs on nearly half of all Chinese imports. Consumers responded by lowering growth prospects for the national economy, and as a consequence, reduced the expected gains in employment. Consumers anticipated an average long-term inflation rate of just 2.2%, the lowest rate the surveys have recorded since the question was introduced forty years ago. The sole component of the Sentiment Index that improved in early June was buying plans for large household durables. That improvement, however, was due to consumers favoring tariff induced buy-in-advance price rationales. In the past year, spontaneously unfavorable references to tariffs moved in tandem with unaided mentions of buy-in-advance rationales for household durables. Negative mentions of tariffs were spontaneously made by 40% of all consumers in early June, up from 21% in May and the prior high of 35% in July 2018; unaided references to buy-in-advance price rationales were mentioned in early June by 19%, up from 12% in May, and just below the 21% in March 2018 (when Trump first announced tariffs on home appliances). Overall, the data indicate that real personal consumption expenditures will advance by 2.5% in the year ahead.


What are the most common types of home improvement projects? How much do homeowners spend on a typical bathroom remodel if installed by professional contractors versus as a do-it-yourself project? What share of the national home improvement market do owners age 65 and over comprise? How does average spending vary at different levels of household income or home value? How have all of these trends changed over time? Answers to these questions and others can be found in the extensive data tables released with the latest Improving America’s Housing report from our Remodeling Futures Program.

The report’s data tables include biennial information on US home improvement and repair spending for 1995–2017 by project type, installation type (professional or DIY), homeowner demographic and socioeconomic characteristics (age, race/ethnicity, income, family composition, etc.), housing stock characteristics (value, year built, structure type, location, etc.), and more. All data tables include the number of homeowners reporting improvement or repair projects, average project spending levels, and total expenditures nationally. These tabulations are produced using American Housing Survey (AHS) data from the US Department of Housing and Urban Development, and the data tables are available for download in Excel format for easy custom analysis.

From Table A-1 we see that the most common project in 2017 was adding or replacing carpeting or flooring, with 5.2 million homeowners, or 7 percent, making this improvement to their home. Other common projects included adding or replacing plumbing fixtures (like sinks and bathtubs), windows or doors, built-in dishwashers or garbage disposals, and water heaters, with 5 percent of owners making each of these types of improvements. In fact, nearly 1 in 4 homeowners had some type of replacement project in 2017 to update home components or systems, compared to 9 percent of owners making improvements to their lot or yard (such as driveways or walkways, fencing or walls, sheds, landscaping, etc.) and 8 percent making discretionary improvements (including kitchen and bathroom remodeling, room additions, and porches or decks).


Tables A-5 and A-6 can be used to compare home improvement projects by installation type, and here the data show that in 2017 average spending for a DIY bathroom remodel was $3,100, or about one-third the amount of spending for a typical professional bath remodel at $9,400. This ratio is fairly consistent across time and across the various project types. Table A-7 provides improvement expenditures by homeowner and housing stock characteristics and answers the question about market activity by age of owners. Strikingly, in 2017, more than a quarter of home improvement expenditure nationally was by homeowners age 65 and over compared to about 15 percent between 1995 and 2005. However, using information on installation type from Tables A-8 and A-9, we see that older owners made up only 17 percent of all DIY spending in 2017, compared to more than 27 percent of professional project expenditure. This indicates that older homeowners are still much less likely than younger owners to do projects themselves, even though their share of the DIY market has expanded significantly over the past decade.


Information on average home improvement spending levels by household income and home value categories in Table A-7 suggests these factors are important drivers of remodeling activity. With higher incomes and home values, homeowners tend to spend significantly more on home improvements. Middle income homeowners spent about 60 percent more on average for remodeling in 2017 than lower-income owners, and higher-income owners spent fully 80 percent more than the typical middle-income homeowner. Similarly, owners with home values between $150,000 and $299,999 spent twice as much on average for improvements in 2017 than owners with homes valued under $150,000, while owners in homes valued at $300,000 or more also averaged 80 percent higher spending than owners in mid-value homes. In 2007, at the peak of the last boom in remodeling, these differences were even greater, with higher-income owners outspending middle-income owners by double on average, and owners of higher-value homes spending 140 percent more on average than owners of mid-value homes.


Read more here.