Americans will spend nearly $233 billion on home remodeling this year, according to the National Association of Home Builders' (NAHB) 2007 industry forecast. That represents a 1.9% increase from the record $228 billion spent in 2006, according to estimates from the U.S. Census Bureau. NAHB announced this forecast today at a teleconference celebrating National Home Remodeling Month.
"Remodeling continues to show strength despite the housing slowdown," said NAHB Remodelers Chairman Mike Nagel, CGR, CAPS, a home remodeler from Chicago. "With more than 120 million homes in the United States plus $11 trillion in owner equity, the demand for remodeling will be there now and in the future." Remodeling currently accounts for more than 40% of the home construction industry by dollar volume.
"Quite simply, we're adding more homes each year than we're tearing down, and these will eventually require remodeling," said NAHB Chief Economist David Seiders. "Compared to other components of the housing industry, remodeling remains one of the few areas to show growth, at least in nominal terms."
Driving the remodeling market are the size and characteristics of the housing stock. With an average age of 33 years and rising, older homes require more remodeling - both in terms of upgrading features to compete with new construction as well as maintaining their physical quality. Though remodeling is somewhat cyclical with new construction, homeowners cannot put off a major repair like a leaky roof as they can discretionary upgrades, and that stabilizes the industry during slower housing markets.