Motor home sales rise in hopeful economic sign

Nearly wrecked by the recession, the recreational vehicle industry is back on the road again, and long-term growth looks good.

By Bruce Kennedy May 20, 2013 9:19AM

RV © Grant Faint/PhotographerIf you find yourself on the road this Memorial Day weekend, you might want to keep track of the recreational vehicles you see.


While not exactly a surefire economic bellwether, RV sales have been coming back after a disastrous recession for the industry, and they may be another indicator of a strengthening economy.


Elkhart, Ind., is the heart of the business, with about 83% of all North American RVs manufactured in the region. Unemployment in Elkhart soared to more than 20% in 2009 as the economic downturn deepened, RV sales plunged and several manufacturers closed their doors or disappeared through consolidation.


"When the stock market went to hell in a handbasket, when the ability to get credit went to hell in a handbasket, when your home (value) all of a sudden . . . went down so drastically, your wealth factor is pretty low. That stops motor home buying," Richard Coon, the president of the Recreation Vehicle Industry Association, said recently at an industry breakfast.


But according to the RVIA, a stronger economy has pulled the industry out of a ditch. The trade group predicts more than 307,000 recreational vehicles will be manufactured and shipped this year. That number is still below the pre-recession high of 353,400 reached in 2007, but it's nearly twice as high as the low point of just under 166,000 in 2009.


Recreational vehicles come in a wide variety of types and price ranges. Units that fit on the back of a pickup and pop-up camping trailers start at about $3,500. They go all the way up to tour-bus-size "home away from home" Class A vehicles, which can run anywhere from $50,000 to the hundreds of thousands of dollars. And of course you need to factor in gas prices.


Richard Curtin, the director of the Consumer Research Center at the University of Michigan, says a combination of factors is behind the recent growth in recreational vehicle sales, including an easing of credit terms and better availability of consumer loans, as well as modest gains in household income.


The RVIA says the nation's demographics are also in the industry's favor. The U.S. currently has a record 9 million RV-owning households, and that number is expected to keep growing as baby boomers retire and take to the road.


Still, Curtin says, a lot of the projected growth could face headwinds from government spending cuts and increases in payroll and income taxes. "While the purchase appeal of RVs will increase," he says, "consumers will remain quite price-sensitive."


More on moneyNow

21Comments
May 20, 2013 11:09AM
avatar
I don't know that it's so much that the economy is improving to the point that the motor homes that are being sold are being used for vacations only.  With the economy stagnating the way it is, I would guys many people are trading in their permanent homes for something mobile. I know that my spouse and I are considering selling our home in the suburbs for a 5th wheel pull behind to live in and not just for vacations. You don't pay property tax, there's no lawn work and you can go where the jobs are.  You live on the cheap in an RV park until you can earn the down payment for something more permanent if that's what you want to do.  Or you can retire and just be a gypsy.
May 20, 2013 1:53PM
avatar
I agree. I think people may be buying a motor home instead of buying a permanent home.
I know that lots of folks retire, sell their house and all their belongings and hit the road. .
My husband and I have considered it.  We figure we can go south for the winter, and then travel to see the kids, parking an RV in their driveway for a month or so,
Doesn't sound like a bad life to me, except for the driving. part.

May 20, 2013 1:48PM
avatar
With the high cost of purchasing the RV (20'-up) & with park rates getting higher every year the camping vacation is not the value it was a decade ago. 
May 20, 2013 4:09PM
avatar
Ha! Rv sales are booming cause some of us are getting out of debt and that means selling our homes to start over the right way. Debt is a curse and slavery. We've had our eye on some older model RV's. I think I might live in a tent if I truly owned the ground I slept on.
May 20, 2013 1:35PM
avatar
RV's are the going thing in Texas where the oil boom is happening.  Workers can't find affordable houses, don't want to buy houses (because they will move when the job moves), work two weeks and be off two weeks ( they go home to their families).  One town I know, only had three RV parks two years ago, now they have 63 RV parks.
May 20, 2013 9:32PM
avatar
I can tell you first hand that the major increase in RV sales is largely due to the oil boom in North Dakota. I run a snack food sales route in western MN and travel I94 daily and for the last two years there has been a steady stream of new RVs heading west. I see very few of them heading any other direction. The oil workers are buying every one the industry can build. As well as mobile homes. It's not the economy that's booming. It's the need for suitable housing in the dregs of North Dakota.
May 20, 2013 3:46PM
avatar

Motor home sales rise when people evaluate their needs for a brick and mortar home in depressed times...and decide it's less expensive living. Vacations...lol...ok...right.

May 21, 2013 10:52AM
avatar
Motor home sales are picking up because more peolpe are having to live in them full time because we can't afford to live in a site built home, let alone purchase one or rent an apartment.
May 20, 2013 3:11PM
avatar

Hey Regal,

 

I am not a right winger, but I am conservative.

If you pay attention to the news of any source, other than Fox, you will see that it is not just the far right that is disappointed and fed up with excuses, Bush's fault, I don't remember, I didn't have anything to do with it and the rest of incompetent lame comebacks for a do-nothing Pres.

 

Even Thrill up his leg Mathews is saying the same thing. 

 

BTW  I love rving and I do think it may be a good indication of the economy comeback. The economy would have been roaring if Romney had won the election that was stolen by Obama's cover ups and lies that all his supporters so badly want to believe.

May 21, 2013 5:04PM
avatar

The reason why mobile homes sales are starting to pick up is that they are cheaper to live in than a regular looking home that is permanently attached to the land. 

 

The economy is not improving, the new homeless class of people ""The homeless working class" find that it is more comfortable to live in mobile home without being saddled to a mortgage payment that they cannot afford. There is more to life than living in debt.

May 20, 2013 11:30AM
avatar
So those that have always done well, never stopped doing well. Motor Home sales are hardly an indicator of the broader economy. Not with more people than ever, on food stamps. Not with Student and other Debt exploding. Not with Global Debt, out of control. Pump Priming only last for so long before yet another Bubble, bursts. This time will be no different.
May 20, 2013 7:53PM
avatar
Right now and probably for the past few years I have been broke. Living in a house ain't cheap especially in the Northeast. With all the "weather disturbances", insurance companies make it hard just to buy some for a home. Got a car on top of renting cause the jobs are not within transit walking distance any more is getting more expensive by the week. It seems almost a "no brainer" to combine the two expenses and just stay in a RV park,or state park. Last road trip I took I saw a lot of RVs staying at rest stops on the freeway. I figure that in a couple weeks the benefits of that will no longer be there somebody will find a way to make it harder to do that, after they make money off it!
May 20, 2013 10:16AM
avatar
Was at a Marina on Cape Cod this weekend and they told me that this has been their best Spring in 10 years. The rich are making money hand over fist and starting to spend it again. It looks like those extra taxes haven't set them back at all. Hopefully it will trickle down to the middle class soon because I haven't seen it yet.   
May 20, 2013 3:22PM
avatar
You can borrow money for a motor home at half the interest rate you pay for a college education.
May 20, 2013 1:53PM
avatar
Every American, irrespective of political alignment, should be concerned with the manner in which this Administration released information to the public regarding Benghazi, and its knowledge of or involvement in the disgraceful (and illegal) manner in which the IRS is alleged to have scrutinized certain groups of citizens.  It would be (or should be) the same if a Republican were president.
May 20, 2013 10:25AM
avatar

The far right bears don`t want to hear about the economy improving.They want to hear

recession or depression.If the market crashed during Obama`s term they would scream

"IT`S OBAMA`S FAULT".Right now the far right is screamong "BENGHAZI AND IRS.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market finished the Thursday session on a higher note with the S&P 500 climbing 0.5%. The benchmark index registered an early high within the first 90 minutes and inched to a new session best during the final hour of the action.

Equities rallied out of the gate with the financial sector (+1.1%) providing noteworthy support for the second day in a row. The growth-oriented sector extended its September gain to 1.9% versus a more modest uptick of 0.4% for the ... More

MSN MONEY'S