Remodeling Spending Expected to Come in From Cold

Home improvement spending will continue to grow at a strong rate this year, according to Piper Jaffray analyst Peter Keith, who attributes the expected gains to rising home prices and pent-up demand from projects postponed by the winter weather. Of the 410 homeowners polled who had deferred a remodeling project, none intend to scrap their plans, he says. Twenty-nine percent of respondents said the cold weather forced them to temporarily shelve large remodeling projects, and 69 percent plan to complete them within the next six months. The most popular remodeling projects are painting, flooring, bathrooms, decks, and patios. Meanwhile, the National Association of Home Builders anticipates a 3.8 percent boost in spending on home improvement projects this year, up from 0.6 percent last year, and forecasts a 2.4 percent increase next year. “As the housing stock ages, there’s more need for renovations,” explains NAHB economic services director Stephen Melman. Additionally, the Leading Indicator of Remodeling Activity from Harvard’s Joint Center for Housing Studies shows a 10.7 percent year-over-year jump in home improvement spending to $140.5 billion in the first quarter, with annual gains of 13.1 percent, 14.5 percent, and 9.4 percent expected in the second, third, and fourth quarters, respectively. | Read More