The remodeling market may be waking up from the doldrums, according to a biennial report by the Joint Center for Housing Studies of Harvard University (JCHSHU).
After spending on home improvement projects declined during the recent economic downturn, several indicators suggest that Americans are ready to renovate again and renew the nation’s housing stock.
For example, previously foreclosed properties are being rehabilitated, as evidenced by $10 billion spent in 2011 on improvement costs for distressed properties. Older homeowners are retrofitting their homes to accommodate their future needs – by 2011, homeowners age 55 and older accounted for 45 percent of all home improvement spending, up from less than 33 percent a decade ago. Plus, spending on energy-related home improvement projects rose from 23 percent in 2007 to 33 percent in 2011.
Also, the number of inadequate owner-occupied homes (having moderate or severe physical problems) went up 7 percent between 2007 and 2011 to more than 2.4 million, suggesting that many homes are overdue for improvement.
Additionally, the future market potential for increased remodeling is huge, considering that the emerging generation of echo-boomers – who will be 21 to 40 years old by 2025 – is expected to be the largest in our nation’s history, which should increase demand for home renovation.
“Our current quarterly projection for the national remodeling and home improvement market shows a really strong trend – almost a 20 percent increase in spending year-over-year through the third quarter of this year,” says Abbe Will, co-author of the study and research analyst for JCHSHU.
Will says the latest numbers imply that homeowners may end up spending more on discretionary remodeling projects – perhaps kitchen and bath improvements and other aesthetic improvements, rather than structural or essential jobs.
“We expect that 2013 will be a good remodeling year for homeowners,” Will says.