Home Improvement Spending is Projected to Grow in 2021

Researchers at the Joint Center for Housing Studies of Harvard University (JCHS) say spending on owner-occupied-home improvements is expected to grow in 2021 in most of the country’s large metro areas, based on data from the center’s Remodeling Futures Program.

The report shows that, following a pandemic-related slowdown, annual home improvement spending should increase from 1-13{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} in 42 major metropolitan areas.

For four of the areas tracked, researchers expect it to decline by 1.5{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} or less.

“Collectively, large metro areas are expected to see stronger remodeling gains in 2021 with an average growth of almost 5{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} compared to an estimated gain of 2{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} in 2020. Fully 14 metros are projected to see robust growth above 6{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} this year, while an additional 17 metros are set for moderate gains between 3 and 6{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16},” noted research assistant Sophia Wedeen.

“Broad strength in house price appreciation, existing home sales, and residential construction suggest that many metros will see greater renovation activity this year,” said Abbe Will, Associate Project Director in the Remodeling Futures Program at the Center. “The largest remodeling spending gains are projected to occur in relatively more affordable metros in the Sunbelt, with over 9{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} growth expected in Oklahoma City, Tucson, Charlotte, Phoenix, and San Antonio.”

“Although home remodeling is a bright spot in the economy overall, owner improvement spending is projected to contract slightly in a few high-cost metropolitan areas including New York, Denver, Boston, and San Jose,” Weeden added. “While other higher-cost metros—Washington, DC, Miami, San Francisco, Los Angeles, and Seattle—are expected to have only modest levels of spending growth between 1 and 3{28ab41d673507bfe0daf970418d2e81f9476b3e139564442359ad7402c370b16} this year.”

The Remodeling Futures Program, initiated by the JCHS in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States.

“The program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry,” according to the center.

See the full report at JHCS.org.