Remodeling pros confident about demand despite labor woes
More home-improvement professionals expect to see their revenues grow in the next year while per-project revenue in the past year is down slighlty, according to the latest HomeAdvisor Farnsworth Index, which tracks the revenue- and lead-generation potential of the repair and remodeling industry across 13 categories.
Respondents indicated that their company’s ability to close leads had largely stayed the same from Q1 to Q2, but that the quality and quantity of those leads improved modestly during the period.
More than half (54.9%) of the 1,582 pros surveyed in May said they faced challenges finding skilled labor in the last year, up 1.3% from Q1. The share of remodeling (60.9%) and landscaping (66.7%) companies saying the same was slightly above the survey average.
Demand for remodeling services is likely to heat up as homeowners become wary of trading up properties amid soaring home prices and dwindling inventory. The National Association of Home Builders' Remodeling Market Index rebounded five points from Q4 2016 to Q1 2017, pointing to growing strength in the market segment.
Homeowners, in turn, are spending more on home-improvement projects. Commerce Department data showed spending in April was 32.3% higher than the year before, representing the biggest improvement in the category since January 2000, Bloomberg reported. The uptick in remodeling and renovation services is fueling employment growth, with the residential remodeling industry's job growth figures outstripping those of all other private employment, according to Labor Department data.
Spending in the category reached $361 billion in 2016, its highest level yet, Harvard University's Joint Center for Housing Studies reported. Remodeling spending is projected to grow another 2% annually through 2025.
Home-improvement professionals are keeping an eye on baby boomers, who are looking at aging-in-place remodeling projects that will allow them to remain in their homes. Nine in 10 people 55 years and older say that, if given the choice between relocating and staying in their existing home as they age, they'd choose the latter, according to CoStar. Remodeling firms reporting work in the aging-in-place category edged up 12 percentage points from 2013 to Q4 2016, with 80% saying they had completed such work, according to the NAHB.
Boomers are expected to drive more than half (56%) of all residential remodeling spending by 2025, according to the JCHS. Still, HomeAdvisor found that less than one-quarter of homeowners have taken on aging-in-place renovations, though 86% are aware of the options.
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