Despite faster employment growth, including in middle-wage industries like manufacturing, and incredibly low mortgage rates, the overall U.S. owner-occupied housing market is still struggling to gain substantial momentum. However, as indicated by a recent report released by Harvard University’s Joint Center for Housing Studies, the home remodeling market continues to flourish.
Kermit Baker, director of the center’s remodeling futures program, predicts that spending in the U.S. remodeling market will expand by 4 to 5 percent this year to at least $330 billion. This would be enough to render 2015 the richest year for remodeling in the U.S. in 15 years, and would also mean that spending in 2015 will exceed the pre-recession peak of $324 billion registered in 2007.
One factor that is constraining spending on remodeling is that homeowners don’t have as much motivation today to install energy-efficient windows, doors and other features given declining energy prices. However, aging Baby Boomers have begun to spend more on handrails, elevators and first floor bedrooms. More Americans are also spending on bigger ticket items like kitchen and bath upgrades.
