Remodelers post strong gains, expect solid growth
Local residents who undertake remodeling projects are projected to spend 6.4 percent more this year than during 2016. In 2015 (the most recent period covered in a new report), per owner spending averaged $3,520 according to an analysis by the Joint Center for Housing Studies of Harvard University.
JCHS researchers attribute the robust remodeling market to a combination of factors, including rising house prices and incomes, an aging housing stock, and an uptick in household growth. Demographic trends will also boost activity over the next decade, with a growing segment of older homeowners accounting for more than three-quarters of the projected growth.
As part of an ongoing series of reports on America's housing, the Joint Center has released a 40-page study titled "Demographic Change and the Remodeling Outlook."
Researchers analyzed spending on both owner-occupied and rental stocks, geographic and demographic differences, challenges for younger households, the industry outlook, and some of the popular upgrades.
According to industry data, the residential remodeling market totaled $340 billion in 2015, a record high. That figure outgained the previous record set 2007 by 7 percentage points. Spending by owners is expected to increase 2 percent per year on average through 2025. Expenditures include both replacement and discretionary projects.
Joint Center researchers identified several trends and specialty niches that account for much of the spending. Projects focused on energy efficiency, environmental sustainability, and healthy homes are popular and likely to see continued growth. Another emerging area with particular appeal to younger households is home automation, encompassing entertainment and security systems and other "smart home" upgrades.
Retiring baby boomers will also spur business for remodelers as they make accessibility improvements that enable owners to remain safely in their homes as they age.
The Joint Center for Housing Studies is a collaborative unit affiliated with the Harvard Graduate School of Design and the Harvard Kennedy School.