Homeowners are planning to spend more to improve their homes this year, up 6.7 percent to a total $317 billion, according to the Joint Center for Housing Studies at Harvard University. More remodeling activity generally indicates fit financials at the household level, as well as confidence and strength in the housing market.
“Growth in home prices is continuing at a healthy pace and encouraging homeowners to make remodeling investments,” says Chris Herbert, managing director of the Joint Center. “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.”
The National Association of Home Builders (NAHB) Remodeling Market Index (RMI) read 53 in the fourth quarter of 2016. (An above-50 reading signals more remodeling activity than less.)
“Many remodelers are seeing consumers commit to larger, long-term home improvement projects,” said 2017 NAHB Remodelers Chair Dan Bawden in a statement on the RMI. “As Americans are seeing wages and home values rise overall, it gives them greater confidence to go ahead and invest in their homes.”
“At 53, the Remodeling Market Index is consistent with NAHB’s forecast that remodeling market activity will continue to grow over the next two years, but at a more moderate annual rate of 1 to 2 percent,” said NAHB Chief Economist Robert Dietz.
In the fourth quarter of 2016, demand for “major alterations/additions,” according to the RMI, fell to a reading of 53, while demand for “smaller remodeling projects” rose to 52. Demand for “home maintenance/repair” fell to 54.