Americans will spend nearly $233 billion on home remodeling this year, according to the National Association of Home Builders’ (NAHB) 2007 industry forecast. That represents a 1.9 percent increase from the record $228 billion spent in 2006, according to estimates from the U.S. Census Bureau.
“Remodeling continues to show strength despite the housing slowdown,” said NAHB Remodelers chairman, Mike Nagel, CGR, CAPS. “With more than 120 million homes in the United States plus $11 trillion in owner equity, the demand for remodeling will be there now and in the future.” Remodeling accounts for more than 40 percent of the home construction industry.
“Quite simply, we’re adding more homes each year than we’re tearing down, and these will eventually require remodeling,” said NAHB economist David Seiders, “Compared to other components of the housing industry, remodeling remains one of the few areas to show growth, at least in nominal terms.”
Driving the remodeling market are the size and characteristics of the housing stock. With an average age of 33 years and rising, older homes require more remodeling — both in terms of upgrading features to compete with new construction as well as maintaining their physical quality. Though remodeling is somewhat cyclical with new construction, homeowners cannot put off a major repair like a leaky roof as they can discretionary upgrades, and that stabilizes the industry during slower markets.
Projected for Gradual Upturn
Existing-home sales are projected to move in a relatively narrow range, with a gradual upturn becoming more pronounced by the end of the year, according to the latest forecast by the National Association of Realtors. Lawrence Yun, senior economist at the Washington, D.C.-based NAR, said last month that while overall housing levels “are historically strong,” sales of existing homes “remain sluggish” compared to the recent boom. “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year,” Yun said, adding that many markets are expected to witness higher sales and strengthening prices during the second half of 2007. Existing-home sales are projected to total 6.18 million units this year and 6.41 million units in 2008 — down from the record 6.48 million resales posted in 2006.
The Continued Downturn In the Nation’s Housing Market
Recent Activity in Housing Starts and Home Sales In Thousands of Units
Table on the right illustrates the steep decline, now in its second year, being experienced by the nation’s housing market — with 2007 housing starts and home sales down significantly from their high-water levels in 2005. Although the housing slump is expected to continue through the balance of the year, conditions are expected to improve by year’s end, with a modest recovery being projected for 2008.
NARI Web SiteNew Site Launched
The National Association of the Remodeling Industry (NARI), launched a new Web site, www.nari.org and www.remodeltoday.com, featuring a fresher look, speedier member search functions and improved access to resources and ideas for both members and consumers.
NARI president, Thomas J. Hagner, CRS, considers the new Web site a great resource for both the homeowner and the industry professional. “NARI’s new Web site provides home-owners a quick resource to find professional remodelers and it offers our members a place to learn, gather information and get connected to others in the remodeling industry.”
Visitors to the site will see improvements that include a revamped design, simplified navigation, and “Quick Links” section that marks the most often visited information for both the industry professional and the homeowner. In addition, visual interest was added with morphing “before” and “after” photos of CotY Award Winning remodeling projects.
NARI Members can log onto the members only page to access consumer leads, and download e-newsletter templates for their marketing needs, and upload enhanced site listing information and graphics.