The US residential real estate downturn is coming to an end, which is expected to boost demand for household goods

The housing market in the United States has always been an important factor affecting the trend of the household goods market. When people buy a new house, they will inevitably spend more or less to decorate the house in a comfortable and beautiful way, which will drive the consumption of household products, especially home textiles, decorations and storage products. Therefore, the start rate of new housing and the proportion of sales can be regarded as a barometer of the home furnishing market.

The U.S. housing market has reached an inflection point, with both new housing starts and sales rising significantly, according to the National Association of Realtors. In the latest data, new homes accounted for one-third of all single-family homes for sale across the U.S. in May, compared with the historical norm of 10% to 20%, showing strong developer confidence in the new housing market. On the sales front, new home sales rose 20% in May from a year earlier. The supply of stock housing is seriously insufficient. At present, the stock of existing homes available for sale in the United States is only 1.08 million units, the lowest level in 23 years since 1999.

Continuing demand for new homes and falling supply of existing homes has led many investors to believe that the homebuilding industry has weathered the recession and is out of the woods. Also, the National Association of Home Builders reported that developer confidence has risen for seven straight months, reaching its highest level since June 2022, in line with earlier upbeat forecasts.

The NAHB also reports that new housing in the United States is smaller and less expensive, allowing homebuyers to save money. Seventeen percent of new homes sold in May were for less than $300,000, the highest share since December 2021. Developers are also doing their best to lower mortgage rates for homebuyers, making monthly payments easier for homebuyers. Falling housing prices and less pressure on mortgages have not only stimulated demand in the housing market, but also increased the disposable income of homebuyers to spend on household items to add to their new homes.

While these latest data and reports point to “good days” ahead for the home furnishing industry, pessimists still worry that political and economic negatives in the U.S. will affect the continued recovery in the housing market.