Residential Remodeling Spending Continues to Slowly Grow
Spending on residential improvements will continue to grow over the next two years at a gradual pace, according to experts at a press conference hosted by the National Association of Home Builders (NAHB) Remodelers at the NAHB International Builders’ Show (IBS) in Las Vegas. Professional remodelers from across the country agreed with the forecast, citing increased consumer confidence and demand.
NAHB predicts that remodeling spending for owner-occupied single-family homes will decrease 0.6 percent in 2020 and increase 1.2 percent in 2021.
“Remodeler certainty continues to remain at a high level, as remodeling spending reached $158 billion in 2019,” said 2019 NAHB Remodelers Chair Tim Ellis, CAPS, CGP, CGR, GMR, Master CGP, a remodeler from Bel Air, Md. “Although there is steady consumer demand in all areas of the country, the biggest challenge continues to be the cost of and lack of skilled labor to meet the interest.”
“We’re not only seeing more requests for proposals because the housing stock is limited, but also a higher request for aging-in-place work because boomers want to stay in their homes longer,” said Nick Scheel, CGR, a remodeler from Spokane Valley, Wash. “Because people are choosing to stay in their homes, the demand and backlog for remodeling remains high.”
“NAHB estimates that real spending on home improvements will even out at a slower place of about -.6 percent in 2020 and an increase of 1.2 percent in 2021,” said Paul Emrath, Ph.D., NAHB’s Assistant Vice President for Surveys and Housing Policy Research. “The biggest factors prohibiting stronger growth is mainly the ongoing labor shortage.”
Although the economy is slowing slightly, the risk of a recession is low and remodeling should keep pace with inflation into 2021.