Home Remodeling Is Still Big Business in a Shaky Economy

Driven by a continuous slide in home prices, consumers are reevaluating and redesigning their living spaces for the long haul, and with more than 20% of mortgages still underwater and foreclosures still plaguing many   housing  markets across America, the “long haul” could be a while.

So what does this mean for general contractors and remodeling professionals? According to a recent survey conducted by the National Association of Home Builders (NAHB), home renovation projects are up from a similar survey conducted in 2010, with nearly 50% of the contractors surveyed seeing an increase in the number of home owners who undertake remodels to avoid moving. Bath and kitchen remodeling projects jumped 17% from two years ago, with bathroom taking the lead as the most common job reported by remodelers, followed by kitchen remodels. In addition, other popular remodeling categories included window and door replacements (44%), whole house remodels (35%), room additions (33%) and handyman services (31%).

And in February, the NAHB stated that the residential remodeling market will continue to experience measured growth in 2012 after the Remodeling Market Index (RMI) rose to a five year-high at the end of 2011. These numbers probably give a good indication that Americans may be inclined to spend some money on sprucing up their current homes while they ride out the sluggish  housing  market. And while average folks are hunkering down, well funded investors are out in full force, securing low priced deals on foreclosed properties to answer the demand of a rising renter’s market.

From kitchen cabinets to bathroom vanities to flooring to appliances, it seems that this remodeling trend is breathing new life into old homes. In 2010, the remodeling industry saw Americans spend $116 billion on improvements to owner-occupied units, and if the recent NAHB survey is any indication, the home remodeling industry should see another banner year as consumers invest in renovations and remodeling again. Finally, beyond an improvement in the U.S.  housing  market, other key factors that should drive remodeling expenditures over the next few years will be a rapidly aging  housing  stock, particularly due to a lack of new construction starts throughout the  housing  crisis, as well as an increasing interest in improving home efficiency and green remodeling.

The National Association of Home Builders (NAHB) is a Washington-based trade association representing more than 140,000 members, and is affiliated with 800 state and local home builders associations around the country. NAHB’s builder members will construct about 80 percent of the new  housing  units projected for this year.