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Remodeling on the Rise

January 18, 2011
FEATURE ARTICLE | Markets & Trends|Window and Door Mag
In the wake of the worst downturn in recent history, the U.S. home improvement industry is poised for growth, according to a new report from the Joint Center for Housing Studies at Harvard University. Over the coming years, remodeling expenditures are expected to increase at an inflation-adjusted 3.5 percent average annual rate, below the pace during the housing boom, but sharply recovering from the recent downturn.

“As both the economy and the housing market stabilize, so too will homeowner improvement spending,” says Abbe Will, a researcher with the center’s Remodeling Futures Program.

The industry, which saw a double-digit decline since its peak in 2007, is beginning to return to a more typical pattern of growth. Market fundamentals—the number of homes in the housing stock, the age of those homes, and the income gains of homeowners making improvements—all point to increases in remodeling spending. “Metropolitan areas with rising house prices, older housing stocks, higher incomes and home values, and a larger share of upscale remodeling expenditures, such as Boston, San Francisco, and Los Angeles, are well-positioned for an upturn in remodeling activity,” says Eric Belsky, the Joint Center’s managing director.

The report, A New Decade of Growth for Remodeling, also predicts the focus of remodeling spending will shift from upper-end discretionary projects to replacements and systems upgrades. Remodeling contractors have a number of growth opportunities generated by underinvestment in distressed properties, lower mobility, changing migration patterns, and the rise of environmental awareness, it is suggested.



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