The homebuilding industry is always changing, thanks to housing trends, shifts in buyer preferences, new technologies and even finance options. We recently sat down with Brad Southern, CEO of LP Building Solutions, and Mike Sims, LP's SVP of Marketing and Business Development, to discuss the latest industry developments.
Question: Do you see housing starts continuing in 2020 at same rate as 2019?
Southern: "New home construction is continuing to recover for single family and multifamily. We see moderate percentage growth-in the single digits-continuing as they have in the past seven or eight years. I think the industry is learning how to build more homes with gradual growth rather than these big swings that we've experienced in years past."
Sims: "We're seeing things relatively flat and very stable. We don't see any major inflection points. We actually believe the demand will average out at 1,3 million starts versus what it was originally forecasted at 1,4 million - 1,5 million. Housing won't come off very much. We're not overbuilt; it's very stable."
Southern: "We're encouraged by the lower mortgage rates for homebuyers, which are at historical lows. Affordability is more in reach in 2020 than in 2019. Homeownership is more accessible, and LP will play a big part of that."
Sims: “The builders have pivoted to more entry-level or starter homes where the demand is from the activation of Millennials. Conversely, Baby Boomers are aging in place in their homes, which bodes well for the repair and remodel segment.”
Southern: "Yes, repair and remodel will continue to be a good and strong market. With the slow progress we've made on new home construction, people are staying in their homes longer. They want to make changes to existing homes, so it's a good outlook for the remodeling industry."
Do you see homes changing size in 2020?
Southern: "For the first time, homebuilders are addressing affordability. The homes are scaling down, they're getting smaller, whichowers the cost. And this, for the most part, is being used to fund the technology in the home. It's a trade-off. This technology can be in smart home additions or accessories, but it can also be present in smarter, more engineered building products that deliver better, more durable and more resilient results for the homeowner in the long term.
Southern: "For the repair and remodel industry, we see no drastic design changes for 2020. Trends tend to focus more on the quality as the market continues to move away from vinyl siding as people are looking to upgrade their aesthetic to hard siding with more definition. People are also adding more accents to give their home a unique look. People are using shake products to finish a gable. Little things to set their home apart from their neighbors. And our wide-ranging, versatile portfolio can help people do little things to set their home apart."
What are the trends in overall home styles for 2020?
Southern: "The day of the cookie cutter home is gone; people are no longer satisfied with it. People want uniqueness; they want character achieved through thoughtful design. LP has a super-wide portfolio from shakes to lap to trim to make a home look unique."
Sims: “Like what Brad is saying, McMansions are out. We’re seeing greater urban building. Here in Nashville–and in many dense, urban areas–tall and skinny homes are a new design trend. The design change is favorable to us as it offers greater flexibility with different types of cladding and shakes and trim. The mixed aesthetics can really play out using the LP® SmartSide® product line.”
Southern: "Builders and remodelers are mixing up design materials so you have some nuanced designs. The trend is moving away from the entire house being done so everything is the same. They like a mixture of exterior looks on a home. It's a very visually appealing aesthetic. We obviously hope this trend continues."
Sims: “We’re seeing more Craftsman-style homes trending, which gives people greater exterior design flexibility–similar to the new Margaritaville-type neighborhoods that are launching.”
Check out the styles and trends that can be achieved using LP® SmartSide® Trim & Siding products.
Anything else making an impact on the industry?
Southern: “Home equity lines of credit (HELOC) offer affordable interest rates. Economics are good. One headwind we’re facing is the availability of labor. We can manufacture to make it easier to install or eliminate an entire installation step, which can be very beneficial to construction firms. We recently announced a proprietary pre-finished siding product, so there’s no need to come back second or even a third time to paint. Additionally, we offer structural solutions that reduce installation time. An example of this is LP WeatherLogic® Air & Water Barrier, which eliminates the need for a second wrap and installs with ease for potential labor cost savings for you and your team.”
With stable growth predicted in both housing starts and remodeling opportunities, 2020 is shaping up to be a good year. At LP, our robust portfolio helps you build and remodel better. For information on building solutions that can help to eliminate steps in the installation process or ways of customizing your customers' homes with high-performance siding, call your LP representative or call toll-free at 1-888-820-0325.
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