Carpet: State of the industry—Higher-end goods boost residential end of the market（3）

There are some positive signs in housing that should favor a boost in carpet sales going forward. Between July 2016 and July 2017, U.S. home values increased 6.8%, according to Zillow, the online real estate database interest. That number is expected to rise another 2.7% within the next year, the company said. This uptick in home prices has helped boost consumer confidence among homeowners, which has increased two months in a row. As a consequence, the residential replacement market has experienced growth as spending on remodeling projects has moved higher. While most of that spending has been for hard surfaces, soft goods have not been shut out entirely.

However, rising home prices are a double-edge sword because it prevents many would-be buyers, especially older millennials, from entering the market. The flip side is that has resulted in a more robust multi-family segment. The multi-family production index (MPI), which provides a composite measure of three key elements of that market—construction of low-rent units, market-rate rental units and “for-sale” units, or condominiums—jumped 8 points to 56 in the sec“Improved units can be attributed to a fairly good builder market in both multi-family and single family as well as the return of home equities in the retail remodel sector,” said Brad Christensen, vice president, soft surface portfolio management, Shaw Floors.

The Main Street segment of the business continues to perform reasonably well, with carpet tile continuing to grow in both small, local businesses and specified commercial. Broadloom, however, continues to lose share in both sectors