March 9,
2018 by Jane Chero in General 
As Baby Boomers are aging out of prime furniture buying years, Generation X households have picked up the reigns with robust consumer spending – despite a much smaller population size. Couple the Gen Xers with the sheer population size of the Millennials and the future for the furniture and home furnishings industry looks promising. This is the third factoid in a series of five factoids giving a snapshot of the five adult generations using data from the 2016 Consumer Expenditure Survey. We highlight Housing Tenure, Race, and Education of consumers by generation. *See Factoid 1 for generation birth years and ages
Housing Tenure
As would be expected, only 33 percent of Millennial households are homeowners, but that number is increasing daily. Generation X has not quite embraced homeownership like their parents, with 62 percent owning their own residence compared to 76 percent of Baby Boomers.
Race of Consumer
Ethnic diversity continues to grow the younger the generation. For heads of households, Hispanics or Latinos have become the second largest segment after Whites, Asian, and all other races – increasing from 9 percent of Baby Boomers to 18 percent of Generation X and Millennials in 2016.
Education of Consumer
The data continues to confirm that Millennials are the most educated generation. In 2016, 71 percent of Millennials were college educated versus 69 percent of Gen Xers and 63 percent of Baby Boomers.
Source: Bureau of Labor Statistics, Consumer Expenditure Survey 2016
March 2,
2018 by Jane Chero in General
As Baby Boomers are aging out of prime furniture buying years, Generation X households have picked up the reigns with robust consumer spending – despite a much smaller population size. Couple the Gen Xers with the sheer population size of the Millennials and the future for the furniture and home furnishings industry looks promising. This is the second factoid in a series of five factoids giving a snapshot of the five adult generations using data from the 2016 Consumer Expenditure Survey. *See Factoid 1 for generation birth years and ages
Generation X had an average household income (before taxes) of $95,168 in 2016, the highest mean household income of any generation in history. Gen Xers households earning on average are 19 percent higher than Baby Boomer households and 45 percent more than Millennials. Of importance is that Generation X has the highest number of earners per households, 1.7 earners, compared to Millennials, 1.5 earners. As Millennials age and grow in the workforce, rising incomes paired with numbers of consumers will increase their 19.4 percent share of consumer spending dramatically.
With the highest incomes and an average age of 43.3, Generation Xers are prime consumers. At an average age of 60, many Baby Boomers have retired, while a majority of Millennials have entered the workforce are gaining more purchasing power at an average age of 28. In fact Millennials have now surpassed Gen Xers in the number of individuals in the U.S. workforce.
Generation X represents the bulk of families with children. They have an average of 3.2 total people per household and 1.2 children under 18. Millennials, however, are starting to have children at a higher pace averaging 0.9 kids under 18 per household – bumping up the average size of a Millennial household to 2.6. Baby Boomers still have an average of 2.1 persons per households, most likely reflecting leftover Millennials still at home for younger Boomers.
Source: Bureau of Labor Statistics, Consumer Expenditure Survey 2016
February 23,
2018 by Jane Chero in General
As Baby Boomers (ages 52 to 70 in 2016) are aging out of prime furniture buying years, Generation X households (ages 36 to 51) have picked up the reigns with robust consumer spending – despite a much smaller population size. Couple the Gen Xers with the sheer population size of the Millennials (ages 35 and below) and the future for the furniture and home furnishings industry looks promising. This is the first factoid in a series of five factoids giving a snapshot of the five adult generations using data from the 2016 Consumer Expenditure Survey.
Baby Boomers still have the highest number of households representing 34.8 percent of consumer units, compared to 27.5 percent for Generation X, and 22.9 percent for the up and coming Millennials.
In 2016, U.S. Households spent $7.42 trillion in the U.S. economy with Baby Boomers controlling 37.2 percent of all total consumer expenditures and Generation X close behind at 32.8 percent. Millennials, with lower average household incomes and smaller numbers, control only 19.4 percent of the total. Regardless, with almost 10 million more consumer households, Baby Boomers still outspend Generation X – despite growing incomes for Gen Xers.
For Furniture and Bedding expenditures, Millennials are stepping up to spend more of their income on home furnishings than any other generation, but still control only 22.4 percent of industry sales. Generation Xers are closing in on Baby Boomers as the generation that controls more industry sales, 34 percent, compared to 34.7 percent for Boomers. As Baby Boomers age out of the furniture industry, the influence of Gen Xers and Millennials will continue to grow.
Source: Bureau of Labor Statistics, Consumer Expenditure Survey 2016
February 16,
2018 by Jane Chero in General
The Housing Industry continues its upward momentum with median prices among both existing and new homes catapulting by over 40 percent since 2011. This is the final factoid in a series of four factoids detailing the steady rise of home prices paired alongside housing inventories and median incomes unable to keep the same pace.
Housing Inventory
Along with rising home prices, low inventory has posed a problem for many home buyers wanting to upgrade housing or buy for the first time. Forecasters see little change on the horizon for existing home sales. Although in a much higher price bracket, new home inventory has steadily increased over the last year – rising 16.5 percent from July 2016 to 276,000 homes in July 2017. In comparison, at a year-to-date inventory of 1.9 million homes, existing home inventory had a typical dip in the fall and winter but is still 9 percent lower from July 2016 to July 2017.
Housing Starts
The growth in new Single-Family unit housing starts will not let up anytime soon. Starts are projected to have double digit growth over the next two years. However, Multi-Family unit housing starts (apartments) has fallen dramatically since the boom of 2014-2015 brought on by pent up demand and also the Millennials pouring into the rental market. Developers complain of long permitting and construction time spans also a lack of skilled workers. However, even though Multi-Family starts are projected to fall slightly next year, this reflects the apartment industry returning to a more realistic growth cycle. The challenge to growth in new home starts will be the affordability for first-time Millennial buyers, and current homeowners seeking to upgrade.
February 4,
2018 by Jane Chero in bedding, General
A robust December pulled furniture and bedding sales up in the fourth quarter of 2017 to $27.25 billion, a 6.3 percent jump above 2016 Q4. For the year, 2017 total industry sales continued a steady climb of 3.86 percent over 2016 reaching $105.19 billion.
Furniture (excluding Bedding) in the fourth quarter increased 6.5 percent versus the same quarter in 2016 totaling $23.56 billion. Compared to the third quarter of 2017, furniture sales grew 5.4 percent. Year end furniture sales excluding bedding reached $89.77 billion, up 4.1 percent over 2016.
Industry sales for Bedding are preliminary for the year as data is mixed. Initial estimates of $3.69 billion put 2017 Q4 sales up 5.3 percent over 2016 Q4. Compared to the previous third quarter of 2017, sales are down 12.2 percent reflecting Bedding’s seasonality. Preliminary year end sales total $15.42 billion up 2.7 percent over 2016.
The fourth quarter in 2017 saw the largest quarter over quarter growth in seven quarters for furniture and bedding. Industry sales of $27.25 billion reflects an increase of 6.3 percent over 2016 Q4. Compared to the previous 2017 Q3, Q4 sales are up 2.7 percent.
Furniture (excluding Bedding) increased 6.5 percent in 2017 Q4 versus the same fourth quarter of 2016 with sales of $23.56 billion. This figure is up 5.4 percent comparing 2017 Q4 to the previous 2017 Q3.
Bedding sales are still under review, but preliminary results show 2017 Q4 Bedding at $3.69 billion, up 5.3 percent over third quarter last year and down 12.2 percent over the previous 2016 Q4. The fourth quarter typically shows a seasonal decline over Q3.
January 26,
2018 by Jane Chero in General
The Housing Industry continues its upward momentum with median prices among both existing and new homes catapulting by over 40 percent since 2011. This is the third factoid in a series of four factoids detailing the steady rise of home prices paired alongside housing inventories and median incomes unable to keep the same pace.
When the home building industry picked up after the Great Recession, so did the price of new homes. Before the recession in 2007, 64 percent of new homes sold for under $300,000. In 2009 at the bottom of the Recession, that number grew as high as 74 percent. Today only 45.7 percent of homes sell $300,000 and under. Since 2011, houses selling above $300,000 have steadily become the majority – up to 54.3 percent in 2017 YTD.
Since the recession, median income has been unable to keep up with the escalation of home prices. Overall, median home prices have risen 28.1 percent from 2007 to 2016 – up to $313,700. The growth of median income stalled with the recession and has slowly improved to $59,900 in 2016. According to ONS affordability data, median price paid for a home leapt 259 percent between 1997 and 2016, while earnings rose only 68 percent.
Source: U.S. Census Bureau, New Houses sold in the U.S. by Sales Price.
January 19,
2018 by Jane Chero in General
The Housing Industry continues its upward momentum with median prices among both existing and new homes catapulting by over 40 percent since 2011. This is the second factoid in a series of four factoids detailing the steady rise of home prices paired alongside housing inventories and median incomes unable to keep the same pace.
As would be expected, regional variation in home prices are significant. At a median home price of $357,443, the West has the highest existing home sale prices. A lack of existing home inventory in the West is most likely causing prices to increase at such a high rate – up 22.5 percent from 2014 to 2017Q2. The Northeast increased by 7.4 percent during the same time period, while existing home prices in the Midwest and South also showed great gains – growing 17.2 and 20.8 percent.
For new homes, the median price in Northeast has skyrocketed up to $497,350 – a jump of 23.5 percent in 3.5 years. New home prices in the West actually declined by (-2.6) percent since 2014, while the Midwest increased 5.5 percent and the South by 8.6 percent.
Metropolitan cities, especially in California, are showing jaw-dropping price increases. The top 3 most expensive cities in 2017 Q2 were California cities with San Jose-Sunnyvale-Santa Clara, CA topping out at $1,183,400.
On the flip side are the 10 metropolitan cities with the lowest median prices of existing homes this year. Youngstown-Warren-Boardman, OH-PA tops the list at a median price $87,000. A couple of these least expensive cities actually made big increases over last year – Decatur, IL is up 12.3 percent while Rockford, IL is up 12.4 percent.
Source: U.S. Census Bureau, Median Sales Price of Houses by Region, National Association of Realtors (NAR) *based on housing prices through 2017 Q2
January 12,
2018 by Jane Chero in General
The Housing Industry continues its upward momentum with median prices among both existing and new homes catapulting by over 40 percent since 2011. This is the first factoid in a series of four factoids detailing the steady rise of home prices paired with both housing inventories and median incomes that are unable to keep the same pace.
At a 98.5 index growth (2007 = 100) in 2017, existing home sales continue to edge closer to pre-recession levels. Although still 21.8 percent shy of 2007 sales levels, new home sales have increased an average of 13 percent each year since 2011. The National Association of Realtors projects the number of existing home sales will increase 2.6 percent this year and inventory tighten further in 2018 at 1.8 percent growth.
For existing home sales, prices have increased an annual average of 6.7 percent since 2011. The median price of existing homes at press time totaled $242,150 – up 11.8 percent from pre-recession prices. At year end, the National Association of Realtors (NAR) projected existing home prices will grow 5.2 percent this year compared to last then moderate slightly into the 3 to 4 percent growth range over the next two years.
New home prices have jumped by 28.7 percent since 2007 and have maintained an upward track post-recession (2011) – growing a yearly average of 5.8 percent and finishing the second quarter of 2017 with a median home price of $313,767. Growth in the median price of new homes is expected to moderate in the last half of this year and the National Association of Realtors forecasts new home costs increasing over 3 percent next year.
Source: U.S. Census Bureau, Annual Rate for New Single-Family Houses Sold, National Association of Realtors (NAR), historical and forecasted
*based on houses sold through July 2017
January 5,
2018 by Jane Chero in General
The top 20 percent of all households make over half (52.8 percent) of all income and pay 78.5 percent of all taxes. This still leaves these households who make over $105,600 per year with 48.6 percent of all disposable income. This is the final factoid in a series of four factoids that details the annual mid-year Consumer Expenditure Survey report (mid 2015 to mid 2016) by the Bureau of Labor Statistics. The report divides the 129 million households in the U.S. into 20 percent quintiles of around 25.8 million consumer units each from the lowest to highest earners.
Lower income families spend a higher percentage of their income on food, shelter, utilities, gasoline, and healthcare, leaving less disposable income for non essentials. However, surprisingly, when it comes to home furnishings and equipment, the disparity in percent of income spent between the ranges does not vary significantly.
Despite the similarity in percent of expenditures spent on home furnishings and equipment among income segments, the vast differences in disposable income put much of the purchases within the top 20 percent of households. 65.6 percent of total furniture expenditures come from the top two income brackets with 44.1 percent from the highest 20 percent. Major appliances and Home textiles are somewhat less concentrated in the highest 20 percent of households with the bottom three income levels accounting for 40 percent of their total expenditures. At 48.1 percent of total expenditures coming from the highest earning households, Floor Coverings are primarily being bought by households making more than $105,600.
Middle income families at one time were the bread and butter of the home furnishings industry. Median household income now stands at $55,775. This places the third quintile or 20 percent of consumer units earning between $38,000 and $63,800 purchasing only 17 percent of all furniture. Most of the home furnishings industry, 65.6 percent of furniture purchases belong to 40 percent of households earning over $63,800 annually.
Source: Bureau of Labor Statistics, Consumer Expenditure Survey, Mid-year Report 2015 to 2016
December 29,
2017 by Jane Chero in General
The top 20 percent of all households make over half (52.8 percent) of all income and pay 78.5 percent of all taxes. This still leaves these households who make over $105,600 per year with 48.6 percent of all disposable income. This is the third factoid in a series of four factoids that details the annual mid-year Consumer Expenditure Survey report (mid 2015 to mid 2016) by the Bureau of Labor Statistics. The report divides the 129 million households in the U.S. into 20 percent quintiles of around 25.8 million consumer units each from the lowest to highest earners.
Lower income families spend a higher percentage of their income on food, shelter, utilities, gasoline, and healthcare, leaving less disposable income for non essentials. However, surprisingly, when it comes to home furnishings and equipment, the disparity in percent of income spent between the ranges does not vary significantly.
Among Home Furnishings and Equipment, the percent of income spent on Furniture and Major Appliances are the two largest segments. Aside from the lowest 20 percent quintile at 0.6 percent share, all income levels use between 0.8 and 0.9 percent of their income on furniture purchases. While the share is roughly the same, the dollars spent differ greatly. With an average annual expenditure of $1,054 on furniture, the highest income segment spends twice as much as the segment below it ($514) and almost four times the amount as the second 20 percent segment ($267).
Similar to furniture spending, the share of income spent on Major Appliances does not change much between income levels – ranging from 0.4 percent to 0.6 percent of income, regardless of earnings. Since a refrigerator or oven is more likely to be considered a necessity compared to a new sofa or table, average expenditures do not vary as much with highest earning households spending an average of $482 and the lowest spending $108.
Source: Bureau of Labor Statistics, Consumer Expenditure Survey, Mid-year Report 2015 to 2016 (Note: The Consumer Expenditure Survey conducted by the Bureau of Labor Statistics which is the basis of this article tends to reflect lower average annual expenditures compared to the Personal Consumption Expenditures tracked by the Bureau of Economic Analysis.)