Homeowners are anticipated to spend 5 percent more on home improvement this year in 41 of 50 major U.S. metropolitan areas, according to a report from the Joint Center for Housing Studies (JCHS), a Harvard University initiative that researches housing issues relevant to public policy. The report also predicts residential remodel spend will grow at least 10 percent in 11 of these cities, led by Kansas City, Charlotte, San Antonio, Dallas and Sacramento.
JCHS’ report showcases a new modeling tool, which forecasts residential remodeling volume and spend projections across the country’s largest metro areas. Researchers used two decades of historical residential remodeling permits, leveraging BuildFax data among other sources, as a benchmark to develop their model. Additional data points used to develop the model’s benchmark include retail sales of building materials, single-family housing starts and single-family housing prices.
The model also found that cities like Tucson, Pittsburgh and Austin demonstrated especially strong growth. In contrast, other cities, like San Diego and Portland, are expected to see subdued growth. Growth in these cities will remain positive, but it will be lower than what was seen in late 2016 or early 2017.
The projected uptick in home improvement spend is in line with BuildFax’s recent Housing Health Report, which saw a 17 percent year over year increase in remodel spend in October 2018. Remodel activity is a critical indicator of economic health, particularly as the U.S. housing stock ages. In fact, residential properties that undergo regular maintenance are correlated with decreased insured losses.
For more information on the health of the U.S. housing market, download the October 2018 report.