Experts Project Continued Growth for Residential Remodeling
Residential remodeling professionals and economic experts are feeling good about the state of the industry.
Over the last year, the remodeling industry in the U.S. has gradually recovered from the economic slowdowns and obstacles caused by COVID-19. Industry experts are now predicting residential remodeling could expand even further over the next two years, as renovation projects are set to grow increasingly popular across the country.
During a panel for remodelers at last week’s National Association of Home Builders IBSx virtual event, NAHB officials predicted remodeling spending on owner-occupied single-family homes will go up four percent this year, then increase another two percent in 2022.
“NAHB estimates that real spending on home improvements will continue to increase in 2021 and 2022 throughout the COVID-19 pandemic,” said Paul Emrath, Ph.D, the NAHB assistant vice president for surveys and housing policy research. “The biggest factors prohibiting stronger growth are mainly the volatile material prices and labor shortages.”
Several professional remodelers who spoke at an IBSx online press conference agreed with this sentiment. Through first-hand experiences, they believe current high levels of demand for their services shows their industry is in a good spot.
“We’re seeing more requests for proposals because of the pandemic,” said Tim Lansford, a remodeler from Texas. “Because people are using their time at home now to remodel, the demand and backlog for remodeling remains high.”
“After the dip at the beginning of the pandemic, remodeler confidence bounced back, and it continues to remain at a high level, as remodeling spending is expected to reach $285 billion in 2021,” added Vince Butler, a remodeler from Virginia. “There is steady consumer demand as Americans are at home much more during the pandemic. This gives home owners more time and a desire to invest in their homes.”
This optimism is not just based on word of mouth or builder sentiment, either. A recent study by the Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) of Harvard University projects home improvement spending will increase in 42 of 46 metro areas across the country in 2021.
“Broad strength in house price appreciation, existing home sales, and residential construction suggest that many metros will see greater renovation activity this year,” said Abbe Will, a JCHS associate project director.
The JCHS’ Leading Indicator of Remodeling Activity (LIRA) projects that year-over-year growth of home renovation and repair expenditure will increase incrementally this year, climbing from 3.5 percent at the close of 2020 to 3.8 percent by year-end 2021.
Chris Herbert, the JCHS managing director, predicts the remodeling industry will benefit from the continued recovery of the U.S. economy at large. That should, at least in theory, free up the budgets of homeowners who may have been reluctant to spend on renovation during the height of the pandemic.
“In addition to routine replacement-and-repair projects, homeowners are likely to pursue more and larger discretionary home improvements this year as the broader economy recovers,” Herbert said.