Further Strengthening Expected for Home Remodeling
CAMBRIDGE, MA — Annual gains in homeowner improvement and maintenance spending are poised to accelerate in the second half of the year and remain elevated through mid-year 2022, according to the Leading Indicator of Remodeling Activity (LIRA).
The latest LIRA, released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, projects that annual growth in home renovation and repair expenditures to owner-occupied U.S. homes will reach 8.6% by the second quarter of next year.
“Home remodeling will likely grow at a faster pace given the ongoing strength of home sales, house price appreciation and new residential construction activity,” said Chris Herbert, Managing Director of the Cambridge, MA-based Joint Center for Housing Studies. “A significant rise in permits for home improvements also indicates that owners are continuing to invest in bigger discretionary and replacement projects.”
Larger gains in retail sales of building materials also suggest that the remodeling market continues to be lifted by do-it-yourself activity, as well,” according to Abbe Will, associate project director in the Remodeling Futures Program at the Joint Center. By the middle of next year, annual remodeling expenditures to owner-occupied homes are expected to surpass $380 billion, Will said.
In a related development, the National Association of Home Builders (NAHB) released its NAHB/Royal Building Products Remodeling Market Index (RMI) for the second quarter, posting a reading of 87, up 14 points from the second quarter of 2020, and a signal of residential remodelers’ confidence in their markets, for projects of all sizes.
“As the market attempts to balance the number of households that want homes and the number of homes available, the value of homes is rising, helping to fuel demand for remodeling,” said NAHB Chief Economist Robert Dietz. “This has been sufficient to keep remodelers optimistic, despite the significant headwinds of labor and material shortages,” Dietz added.
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