The nation’s home remodeling business is pulling out of a long slump, as demand from an aging population and a pickup in housing activity takes root, according to academic and industry surveys.
The uptick in remodeling is a sign that a renewal of the U.S.’s housing stock is under way, a report from the Joint Center for Housing Studies at Harvard University concluded.
“As baby boomers move into retirement, they are increasing demand for aging-in-place retrofits,” said Kermit Baker, director of the Joint Center’s Remodeling Futures Program.
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Homeowners over 55 account for more than 45 percent of remodeling expenditures, the Harvard study said.
Other factors contributing to the remodeling resurgence include the fact foreclosed properties are being rehabilitated and that sustainable home improvements are gaining popularity, the study found.
“With about 3 million more foreclosures and short sales in the pipeline, there is even more such spending ahead of us,” said Eric Belsky, managing director of the Joint Center.
NBC News reported industry experts as saying the pickup in home remodeling has come just as home prices have staged a convincing bottom in much of the country. Rising home equity is also helping to finance the work, NBC reported.
“All of those homes that have gone through foreclosure or short sales are now coming back on the market,” Baker said. “In a lot of cases these properties have been abandoned for the last few years. So you’ve got some properties in pretty tough shape.”
The National Association of the Remodeling Industry (NARI) was upbeat in its latest quarterly survey released earlier this month. It said two-thirds of respondents had a positive view of U.S. remodeling activity in the next three months.
“Remodelers are indicating major growth in the future, with many saying that clients are feeling more stable in their financial future and their employment situations; therefore, they are spending more freely on remodeling needs,” said Tom O’Grady, a Pennsylvania builder and NARI committee member.
Some NARI members acknowledged many consumers may be remodeling out of necessity.
As one NARI member put it, “Homeowners are still concerned about spending money but will do so because they cannot postpone any longer. They are spending more conservatively than they did prior to the [financial] crash.”
The minority expressing pessimism in the NARI survey cited uncertainty caused by federal tax increases and “leadership issues” in Washington, the trade group said.
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