Wood Industry Helped by Home Improvement Rebound

Wood Industry Helped by Home Improvement ReboundMINNEAPOLIS - Positive economic signs continue for woodworkers, carpenters and other woor industry players, as home renovation projects rise along with the overall real-estate market. January's housing market increased velocity 22% from January 2012’s level as the market continued to gain momentum after posting an annual gain of 15% for all of last year, according to the U.S. Dept. of Commerce. Housing's rebound is pulling up lumber sales and costs with it. ENR’s 20-city average price for the most commonly used species of 2 X 4s increased another 0.6% in March, marking the seventh consecutive monthly gain and pushing prices 13% above March 2012’s level.

Sustained growth in the housing industry's level of home improvement projects remains critical for the economy as a whole, as the preliminary fourth-quarter GDP report from the Bureau of Economic Analysis demonstrates. Home building (residential fixed investment or RFI) was a net contributor to our nation's economy for the seventh consecutive quarter. Home builders are doing more than their share of to boost the economy and lumber sales. "As snow melts, home improvement projects are already picking up," says Butch Sprenger, owner of Destiny Homes.

"Twin Cities home builders are gaining a boost from the tight inventory of existing homes for sale," Sprenger adds. "When potential home-buyers cannot find their dream home on the market, they call us to renovate their existing home or may consider building a new home. We depend on countless wood products from hardwood flooring, to kitchen cabinetry, much less the lumber used for framing a home. Home-buyers were out in force during the months of January and February with sales of upper-bracket houses in the Twin Cities on the rise."

Home builders are experiencing a promising rebound in requests for new construction, full house makeovers, and home remodels of every size. It is an uptick that Twin Cities home builders are excited about. "The Michigan Home Builders Association is projecting about a 40 percent increase in new home construction, and Minnesota expects no less. I think you’re going to see a ten to fifteen percent growth in this area,” projects Sprenger.

Though newly constructed homes represent a slice less than 20 percent of the housing sales market pie, they have an outsize impact on the economy. On top of boosting the lumber industry, each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Home Builders (NAHB).


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