Home Remodeling Spending Hits Record High
The market indicates that it's a great time to be a pro remodeler.
Contractors regularly have their hands full with managing individual jobs and dealing with the hundreds of other tasks that come with running a business. And that means it can be hard to stop and get a big picture view. So when someone takes the time to run the actual numbers, it’s worth taking time to check in on the health of the market.
This recently-released report from Harvard University’s Joint Center for Housing Studies provides a deep-dive into the U.S. home remodeling industry. The good news is that the market has expanded by more than fifty percent since the end of the Great Recession. In fact, by 2017 remodeling spending had reached a new all-time high.
The study (titled “Improving America’s Housing”) found those regions that recovered quickly from the recession have also seen the greatest increase in home remodeling spending. This is especially noticeable in markets with limited housing supply, such as densely populated regions on the coasts. Those areas are currently seeing an increasing number of rental properties being converted into owner-occupied units, which in turn requires upgrades to meet buyer demands for a higher level of finish.
The dramatic growth in remodeling spending has also been amplified by the aging-in-place boom. The housing market continues to evolve in response to the country’s changing demographics, and the Harvard report notes that older homeowners dominate the remodeling market, with households aged fifty-five and over accounting for half of all remodeling spending.
As for what the future holds, many experts anticipate continued growth, even if it’s at a more modest pace. The National Association of Home Builders predicts that spending on owner-occupied residential remodels will increase 1 to 2% annually in 2019 and 2020. If that holds true, spending volume will continue to set records even as the rate of growth slows.
Taken as a whole, the numbers from across the industry tell us one thing very clearly: This is a great time to be in the remodeling industry!