"We have seen extraordinary growth in the remodeling industry over the past year, and we expect to surpass that in 2006," said Vince Butler, chair of the National Association of Home Builders' Remodelors' Council. "The most popular remodeling projects continue to be kitchens and baths, which usually get the most return on investment. Homeowners want to concentrate on the areas where they spend the most time."

NAHB economists expect remodeling expenditures to grow by 13.2 percent from 2005, the largest increase in more than a decade, to a record $238 billion in 2006.