Hoping to finally get going on those big remodeling plans this year? You’re not alone, according to a study the Remodeling Futures Program at Harvard’s Joint Center for Housing Studies released on Feb. 24.
Spending on residential remodeling is expected to grow 13.8% across the country’s 48 most populous metropolitan areas, the study indicates. Tucson is expected to see a 23% gain, the largest of any metro area analyzed in the study. Only Tulsa, Okla., is expected to see a decrease, from 11.2% at the end of 2021 to 9.1% at the end of 2022.
In the Boston area, the research suggests the increase will be just under the national average, up from 0.8% in the fourth quarter of 2021 to 13.2% in the fourth quarter of 2022.
“Homeowners have a lot more equity in their homes, due to the roughly 30 percent runup in home prices that we’ve seen over the last two years or so,” Dietz said. Those hoping to cash in on the hot seller’s market may look to freshen things up before putting their home up for sale. Indeed, most remodeling happens right before a property hits the market, Dietz said.
The median age of homes has also increased over the past 15 years, from 31 to around 40 years old, Dietz said.
After decades of wear and tear, more homes will require repair and replacement projects.
Furthermore, the pandemic has led people to reimagine what they want — or need — their homes to be.
“The COVID crisis is going to produce some persistent effects in terms of how people use their homes,” Dietz said. “There’s going to be an additional need for structural changes, including home offices, for example, under the anticipation that maybe thirty to forty percent of the workforce is going to work at home two or even three days a week.”
There are limiting factors on the supply side, however, and they’re the same ones home builders and developers are contending with: shipping delays, the rising costs of building materials, and a limited workforce.
Prices for materials are up 20% year over year, and there are delays in shipping for everything from appliances to lumber, Dietz said. This likely means higher prices and longer wait times for those looking to update their kitchen or add a home office this year.
“Remodelers themselves are quite confident they’ve got a lot of demand in front of them,” Dietz said, “but they have some pretty significant challenges on the supply side.”
These factors mean that this increase in remodeling activity may not be long-lasting.
“Although home remodeling is expected to accelerate broadly across top metros, ongoing shortages and rising costs of labor and building materials may dampen activity in the coming year,” Carlos Martín, project director for the Remodeling Futures Program, said in a news release.