According to a major report released today by the Joint Center for Housing Studies at Harvard University, the U.S. home improvement industry is poised for growth.A New Decade of Growth for Remodelingis the sixth and latest report in the Improving America’s Housing series, published by the Remodeling Futures Program at the Joint Center.
both the economy and the housing market stabilize, so too will homeowner
improvement spending,” says Abbe Will, a researcher with the Remodeling Futures
Program. 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.
report notes that the remodeling industry’s double-digit decline, which peaked
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.”
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, managing director of the Joint Center.
according to the report, the focus of remodeling spending in the next five
years 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.”
household mobility following the housing market crash means that in the coming
years homeowners will increasingly focus on improvements with longer paybacks,
particularly energy-efficient retrofits,” says Kermit Baker, director of the
Remodeling Futures Program at the Joint Center. “Also, a slowing of migration
to traditionally fast-growing Sunbelt metro areas means that, at least temporarily,
more remodeling spending will remain in older, slower-growing areas in the
Rustbelt and in California.”
the full text of the reporthere.
Harvard University: U.S. remodeling industry poised for growth
January 13, 2011