Trends involving sustainably healthy homes, rental housing improvements, and aging in place all will help drive growth in spending for home improvement projects in coming years, one of the nation's leading experts on remodeling said today.
Kermit Baker, director of the Remodeling Futures Program at Harvard University's Joint Center for Housing Studies (JCHS), also said that his group expects double-digit increases in spending on major home improvements this year and next.
"We feel the market moving through 2013 has a fair amount of momentum to it," Baker said during a webinar for remodelers sponsored by the National Association of Home Builders (NAHB). "... Most contractors we're talking to see strong signals in the market." Indeed, JCHS' Leading Indicator of Remodeling Activity, or LIRA, forecasts that spending on major home improvements will rise 19.8% this year from last to total $149.6 billion. That total takes in spending for big-ticket projects such as kitchen and bath jobs but excludes maintenance expenditures and spending on rental housing.
Baker said that a survey of contractors commissioned by JCHS and conducted earlier this year indicated awareness of and interest by remodelers in a variety of sustainability topics including energy efficiency, insulation techniques, reuse of materials, saving water, and improving indoor air quality. One-third of the remodelers surveyed said they had worked in the past year on projects that promote a healthy indoor environment, Baker said. On the other hand, 25% said they didn't know whether they did — a sign to Baker that there's even more potential upside in this area.
As for rental housing, Baker disputed the notion that this is a blank area for remodelers, for two reasons. First, almost 40% of the nation's 39 million occupied rental units are single-family homes, he said. And second, the median age of all rental units is four years older than the median age for all owner-occupied homes. Both factors suggest that these homes ultimately will need maintenance and improvement work done on them.
Aging in place is another opportunity, Baker said. The number of homes owned by people age 65 and above is growing rapidly as baby boomers enter their golden years. The JCHS official also cited AARP research showing that, in 2005, 89% of people aged 50 and above want to remain in their current home as long as possible. —Craig Webb is editor-in-chief of REMODELING. Find him on Twitter at @RemodelingMag.