Remodeling spending to grow in large US metros in 2017
A new study released by the Joint Center for Housing Studies of Harvard University predicts growth in home-improvement spending in 43 of the country’s 50 largest metro areas this year. Within those markets, spending will be 6.8% higher than in 2016, according to the report.
Spending increases will be most significant in a handful of markets, with double-digit growth expected in Milwaukee (25%), Providence, RI (17.9%), Minneapolis (16.7%), Boston (16.5%), Columbus, OH (15.6%), and Kansas City, MO (15.6%). The West has just one market — Sacramento, CA — with growth forecast above 10%.
The study projected a spending decline in five of the top 50 cities: Houston (-5.1%), Miami (-3.6%), Buffalo, NY (-3.5%), Baltimore (-1.5%) and San Francisco (-1.3%).
In 2016, existing-home sales reached their highest level since 2006, according to the National Association of Realtors. That growth will likely be a boon for remodeling spending as buyers seek to renovate recently purchased homes. Similarly, homeowners who had been waiting out the recession may make improvements to their own houses in preparation to finally sell and move up.
Two of the cities expecting strong remodeling activity based on the JCHS report — Boston and Providence — reside in states with the oldest median age of housing stock (49 to 59 years). Other cities poised for activity in their remodeling markets — Hartford, Sacramento, Cleveland, Columbus, Cincinnati and Milwaukee — are in states with a median housing stock age of 40 to 49 years.
The JCHS report comes at a time of cautious optimism in the remodeling industry. The latest National Association of Home Builders Remodeling Market Index dipped slightly from the third to the fourth quarter of 2016 but remained above the breakeven mark. In January, the JCHS’s Remodeling Futures Program predicted home-improvement spending to increase 6.7% to $317 billion in 2017, consistent from 6.9% growth in 2016, suggesting continued activity in the sector.
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- Joint Center for Housing Studies of Harvard University Remodeling Activity Projected to Grow in Most Metropolitan Areas