For the third consecutive week, mortgage rates pushed past 3% – with the average mortgage rate for a 30-year fixed loan up four basis points last week to 3.09%, according to Freddie Mac’s Primary Mortgage Market Survey.
Rising mortgage rates typically signify a recovering economy, and despite applications for mortgages dropping week-over-week, Freddie Mac’s chief economist Sam Khater expects a 3% rate to sustain market interest for many potential buyers.
A number of economists say rising rates may just be what the industry needs to cool the insane housing demand the market has been struggling to maintain for months. Increased inventory was the initial hope. However, due to consistent materials supply shortages and lumber prices that are up about 200% since April 2020, builders’ confidence index dropped in March. Single-family housing starts declined last month.
“The elevated price of lumber is adding approximately $24,000 to the price of a new home,” said NAHB Chairman Chuck Fowke. “Though builders continue to see strong buyer traffic, recent increases for material costs and delivery times, particularly for softwood lumber, have depressed builder sentiment this month. Policymakers must address building material supply chain issues to help the economy sustain solid growth in 2021.”
Now, economists are keeping a watchful eye on the speed in which interest rates have risen, said Doug Duncan, Fannie Mae’s senior vice president and chief economist.
“Underlying Treasury rates have risen, though lenders have absorbed some of the rise by shrinking spreads, as confirmed by our recent Mortgage Lender Sentiment Survey results,” said Duncan. “While the rate rise will curtail refinances to some degree, 2021 is poised to be a good year overall for housing activity and housing finance, as the economy continues to recover and COVID-19 restrictions ease.”
Duncan said Fannie Mae is watching for risks around monetary and fiscal policy on interest rates moving forward, though none are an immediate threat as the Federal Reserve has not changed its FOMC statement for several months.
Nevertheless, mortgage rates remain near historic lows (they are still 0.8 percentage points below the 2019 average), but if the price of housing can’t cool in time, many first-time homebuyers may miss the chance to take out a record low rate. Despite this risk, Fannie Mae’s baseline view is that the recent rapid rise will not continue but that rates will drift only modestly higher over the remainder of this year.
“Essentially, we believe the Fed will keep policy accommodative for longer, not tightening until inflation clearly exceeds its 2.0-percent target for a substantial period,” Fannie Mae said. “This view is consistent with current market measures, such as Fed Funds futures, not anticipating any rate hikes until 2023 and, even then, at a slow pace.”
When space permits, an island has become the heart of the room.
White is still the go-to color for kitchens, but other colors are gaining momentum in personalization.
Zones for tasks like baking, coffee making, and working are the new way to separate space.
Kitchen trends are like fashion—wait a season and this color will be in and that one out. But the changes since the start of the pandemic a year ago have emerged to keep the room true to its moniker as the heart of the house.
With more people working remotely—and cooking all their meals at home—the kitchen has become more than a place to prepare food. It’s transitioned to an all-in-one work, gathering, eating, and storage hub, says designer Prosha Korangy of Prosha Design.
Or as interior designer Ximena Rodriguez, a principal and director of interior design at CetraRuddy Architecture, puts it, “It has become a space to enjoy living.”
From cabinetry and appliances to lighting and smart technology, 2021 kitchen trends have arisen as highly functional and beautiful, says Liz Brooks, executive vice president of sales and marketing at developer Belgravia Group.
While some changes started before COVID-19 hit, others kicked in after stay-at-home orders spread. Many homeowners realized “the importance of their home as their refuge,” says Mick De Giulio, owner of deGiulio Kitchen Design. That spurred homeowners with funds and access to contractors to proceed with remodeling projects, he says.
Here are 10 kitchen changes most sought after by homeowners in 2021:
The number of homeowners renovating interiors to gain an open-concept plan has dropped since 2019, according to the 2021 U.S. Houzz Kitchen Trends Study. Instead, it’s evolved into a desire for flex space—a reimagined open concept. Since the pandemic started, designer Jodi Swartz found many homeowners hiring her KitchenVisions firm to take down walls “to keep an eye on their children while cooking,” she says. Other homeowners sought an adjacent space to keep work, hobbies, or play out of the main living space.
Within the kitchen layout, De Giulio says the work triangle of the sink, refrigerator, and cooktop being close proximity is still paramount. But with more people congregating in the kitchen, design is shifting to add ancillary zones. Peter Albanese, vice president of kitchen and bath at Bellari Home Remodeling, often puts a charging station near a kitchen entry. De Giulio likes to include a “LaMattina” or morning breakfast center. A baking center has gained interest, according to Houzz, as more homeowners prepare breads and cakes, and post in cooking groups like KitchenQuarantine. Many homeowners also want a comfortable seating area for eating, working, schmoozing, which Interior Makeovers designer Lori Gilder likes to put in a windowed corner, preferably with a banquette.
“The bigger the better” seems to be the rule, and larger kitchen island designs could replace a table, says Linda Fennessy of Kitchen Magic. Just how big is big? “Enormous,” says architect Bob Zuber with Morgante Wilson Architects, who cites 7x14½ feet as common, so that it can fit several people sitting or working together, plus room for a sink, dishwasher, and microwave. Architects Stuart Cohen and Julie Hacker like to make gathering around these islands more comfortable by rounding corner edges, while designer Susan Brunstrum of Studio Brunstrum recommends chairs or swivel stools with cushions and backs in a laminated fabric for comfort and easy cleaning.
Quartz and quartzite replaced granite as go-to surfaces years ago, primarily because they are less ubiquitous, more durable and nonporous, and associated with greater healthfulness due to their antimicrobial properties, says designer Chris Dreith of The Home Improvements Group. The main differences between them are that quartz is manmade and easier for fabricators to match patterns, while quartzite is a natural stone and it takes effort to find slabs with grains that work together. Quartzite can handle higher heat without burning—up to 500 degrees versus 275 for quartz, says De Giulio. There are also materials like Staron®, an acrylic option that’s engineered to be nonporous and is more affordable than quartz, quartzite, marble, and granite.
Backsplashes have become a way to add personality to a kitchen. Fennessy says more people are moving beyond traditional rectangular subway tiles to herringbone, hexagonal, picket fence, and penny-round mosaic patterns. De Giulio adds visual warmth and character backsplashes with a mix of materials such as textured wood and shiny metal. Another way to introduce boldness is with a single slab covering the backsplash, which eliminates cleaning grout lines, says Korangy. When homeowners tire of their choice, a backsplash is among the easiest, most affordable changes, according to Swarz.
With so many demands placed on the kitchen, homeowners are favoring appliances that serve multiple functions. Dreith says many clients are choosing steam/convection ovens and hot water/filtration systems. Cooking more at home has led to bigger appliances, from longer sinks—sometimes five feet and with features like sliding cutting boards—to tall columns designated for refrigeration or freezing, and more personalized components. SubZero, Wolf, and Cove now offer 15-inch modules that let the homeowner assemble their ideal cooktop, with options such as a wok, deep fryer, and gas or eclectic oven options, says Jeff Sweet, corporate manager of product marketing. Many homeowners are also looking for help from technology. SubZero’s new Cove dishwasher line has a partnership with Amazon and can alert homeowners when they need more detergent pods. And faucets now come in water-efficient, no-touch options.
To stay healthy, safe drinking water and fresh air no longer mean having just a purification system attached to a faucet or venting odors and stale air through a range hood. Homeowners want a water purification system for their entire house, says real estate salesperson Tony Mariotti, CEO of RubyHome. He has clients who like to shower with “conditioned” water. To achieve proper ventilation, some homeowners are adding larger windows as well as installing a hood blower with a larger capacity. The size depends on room dimensions, odors produced, and the equipment’s cubic feet per minute (cfms). De Giulio likes to dial back vent noise by placing equipment in an adjacent space and suggests homeowners consult an HVAC specialist. “It’s a tricky science,” he says. But something as simple as houseplants can help purify air, says Gena Kirk, vice president of KB Design Studio for KB Home.
LEDs have grabbed the spotlight, whether under, in, and above cabinets, in ceilings, and along toe kicks. One reason, they’re more energy efficient; another—technology has made it easier to achieve a warmer, dimmable LED, which Gilder favors. She suggests a range between 3,000 and 4,000 kelvins (K). In addition, LEDs are programmable to vary in brightness and colors, says Dreith. Houzz found pendant lighting remains popular dangling above an island, but some experts, like Brooks, now prefer one substantial fixture.
Besides needing better storage for buying in bulk and making fewer runs to stores, homeowners are also looking to designers to help find places to better stash pantry goods, dishes, glasses, cutlery, and small appliances, says Mary Cook, president of Mary Cook Associates, a design firm. Some homeowners are adding on “super pantries,” akin to small, second kitchens, says Zuber. If space and budget don’t permit something that large, Fennessy recommends building a pantry cabinet with rollout shelves and room at the bottom for taller items.
When it comes to cabinetry, drawers are preferred to cabinets since they’re easier to access, says Dreith. Flat rather than shaker style is also favored for easier cleaning and they because they can be dressed up with hardware, says Brooks. Homeowners are interested in cabinet systems to organize everything from cookie sheets to spices to recycling bins, Houzz found. Those who prefer a modern look want some open shelves rather than all cabinets on top, says Rodriguez.
More people at home equate to more wear and tear on floors, so durable, easy-to-clean choices rank high. The Houzz survey found that vinyl wood-style planks have become more popular than hardwood, but many designers like Fennessy say clients prefer hardwood and engineered wood over vinyl wood planks to mimic the modern farmhouse look. De Giulio’s clients favor wider planks, as well as old-fashioned, elegant, hand-scraped floors.
10. Auxiliary outdoor kitchens.
Homeowners value outdoor space more than ever. Designer Cristin Michele Beavers, a real estate salesperson and founder of CMB Designs, outfits clients’ Southern California yards with all the bells and whistles, from pizza ovens and smokers to wine fridges, warming drawers, heaters, furniture, and fireplaces. The warm weather locations offer incentive to invest in the outdoor living area. De Giulio says many of his clients request a good grill, countertop, and maybe an outdoor sink.
No matter the makeover a homeowner is planning, they should be aware of the lumber shortage in the U.S., which is increasing costs of materials and labor. Eventually, “when production and distribution rise to meet demand,” Zuber expects costs will decrease. “A lot was due to people getting sick and factories shutting.”
Is the White Kitchen Passé?
Despite a 4% decline from the prior year, white remains the most popular color choice for kitchens, according to the 2021 Houzz survey, followed by wood tones, then gray. But the bigger news is that many multicolor (often bold) kitchens are steadily growing in preference, says Brunstrum. Reasons cited are that homeowners want to personalize the room and have less concern about resale or what the next buyer wants.
Colors and different materials and textures now appear in myriad ways. Swartz is designing cabinetry in pine green, robin’s egg blue, and navy. Albanese, says pink tiles are back but in a soft rather than bubblegum ‘50s hue. Designer Katja Van der Loo of Papyrus Home Design is wallpapering kitchens again, which might introduce a mix of colors. Korangy mixes it all up: In one kitchen, blackened steel countertops with marble backsplash and laminate cabinets, and in another, salvaged wood, laminate wall surface, quartz countertop, and stainless steel toe kick.
Even appliances come in colors. Brunstrum paired a red range with blue cabinets. Fennessy predicts orange and magenta will be huge, along with more perimeter and island cabinets and countertops displaying different palettes, a trend from years ago that is re-emerging.
New condo developments, often tamer and more monochromatic, now offer greater color choices with their finish packages. At the Parkline Chicago development, residents can choose from four palettes to meet individual aesthetics, says Thomas Roszak, president of Parkline developer Moceri + Roszak.
Houzz, a popular online design community, recently a report based on more than 2,000 U.S. homeowners’ responses to reveal the latest trends. Here’s what they found:
Open plan loses favor. The number of homeowners fashioning an open plan dropped 43% in 2021, but one in five sought a kitchen that opens to an outdoor space.
Storage. More than one-quarter of those surveyed added cabinets to their renovated kitchen, four times more than the prior year.
Recycling. The most common specialty drawers are pull-out waste or recycling drawers.
Cookies and spices. The most popular cabinet organizers are for tidying up cookie sheets, favored by 48% and spices at 39%.
Fewer appliance upgrades. Appliances and fixtures were less likely to be included in a renovation, declining by 51% and 74% respectively.
Wireless. Among appliances that have been replaced, wireless controls have grown by 5%.
Outfitted islands. Nearly two-thirds of renovated kitchens feature an island with half of those including an appliance—usually a dishwasher or microwave.
Neutral walls. While gray, white, and beige still reign supreme on wall surfaces at 28%, 26%, and 21% respectively, homeowners go for more multicolored backsplashes, black stainless appliances, and blue walls.
Dollars spent. The median amount spent on major kitchen remodels—which includes replacing cabinets—remained stable at $35,000.
Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, includingThe Kitchen Bible: Designing the Perfect Culinary Space(Images Publishing, 2014). Barbara’s most recent book isThe Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Image
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