‘Strong, Stable’ Growth for 2017 Home Improvement/Repair Markets
Reports from the Joint Center for Housing Studies at Harvard University and the National Association of Home Builders forecast a strong and stable market for home improvement and repair in 2017.
The Joint Center’s Leading Indicator of Remodeling Activity projects annual growth in home improvement and repair expenditures will remain elevated throughout 2017 with spending levels ending the year up 6.7 percent at $317 billion, on par with the 6.9 percent growth estimated for 2016.
Chris Herbert, Managing Director of the Joint Center for Housing Studies, said home remodeling and repair should see “sustained momentum in 2017.
“Growth in home prices is continuing at a healthy pace and encouraging homeowners to make remodeling investments,” Herbert said. “Home sales are remaining on an upward trajectory, as well, and this coupled with continued growth in remodeling permit activity suggests another strong year for home improvements.”
Abbe Will, Research Analyst in the Remodeling Futures Program at the Joint Center, said spending in 2014 and 2015 was not quite as robust as their model estimated, growing 11.3 percent over these two years compared to 14.3 percent as estimated.
Meanwhile, the NAHB Remodeling Market Index posted a reading of 53 in the fourth quarter, a decrease of four points from the previous quarter but on par with levels seen in the first half of 2016. The survey said remodeler confidence has held firm in positive territory for 15 straight quarters. An RMI above 50 suggests more remodelers report market activity is higher (compared to the prior quarter) than report it is lower.
Among its components, major additions and alterations waned one point to 53, demand for smaller remodeling projects decreased by four points to 52 and the home maintenance and repair component declined by five points to 54.
The index measuring future market indicators reached 52, about the same level as early 2016, but six points lower than in the third quarter. Among its four components, calls for bids and appointments for proposals fell to 49 and 54, respectively, the backlog of remodeling jobs dropped three points to 55, and the amount of work committed declined five points to 50.
“Many remodelers are seeing consumers commit to larger, long-term home improvement projects,” said 2017 NAHB Remodelers Chair Dan Bawden. “As Americans are seeing wages and home values rise overall, it gives them greater confidence to go ahead and invest in their homes.”
NAHB Chief Economist Robert Dietz said the forecast suggests remodeling market activity will continue to grow over the next two years, but at a more moderate annual rate of 1 to 2 percent.
