The residential remodeling market has “more than fully recovered” from a decline during the COVID-19 pandemic, according to the National Association of Home Builders. The association predicts that spending on remodeling projects will increase 4% this year, and another 2% in 2022.
“NAHB estimates that real spending on home improvements will continue to increase in 2021 and 2022 throughout the COVID-19 pandemic,” Paul Emrath, NAHB’s assistant vice president for surveys and housing policy research, said during a session at IBSx in mid-February. “The biggest factors prohibiting stronger growth are mainly the volatile material prices and labor shortages.”
Homeowners are eager to get started on projects, but contractors are trying to juggle multiple pressures. Houzz‘s Q1 Renovation Barometer found that project inquiries and new committed projects for architectural and design services increased. Bridging the gap between inspiration and implementation is harder, though, as the barometer for construction services fell.
“Businesses in the home remodeling industry are kicking off the year with cautious optimism,” Marine Sargsyan, Houzz senior economist, said in a statement. “Favorable interest rates and increased pandemic-related demand for remodeling have given architectural and design firms confidence for Q1 compared with the previous quarter. Yet, construction businesses have tempered their expectations slightly as they continue to face supply chain constraints, labor shortages and increasing costs for materials, such as lumber.”
The remodeling sector was sluggish last year as house-bound homeowners cast a critical eye at their homes and filled their quarantine hours with small DIY projects, according to the Joint Center for Housing Studies of Harvard University. The organization’s Leading Indicator of Remodeling Activity projects spending on remodeling projects will increase 3.8% by the end of 2021.
“The remodeling market continues to benefit from a strong housing market—including accelerating growth in homebuilding, sales and home equity,” Chris Herbert, managing director of the Joint Center for Housing Studies, said in a statement. “In addition to routine replacement and repair projects, homeowners are likely to pursue more and larger discretionary home improvements this year as the broader economy recovers.”