The latest release of U.S. Census C-50 data provides further proof that the remodeling industry is healthier than ever.
According to the data, Americans spent $198.6 billion on home improvement in 2004, up from $176.9 in 2003. The increase — 12.3% from year to year — represents the biggest gain in more than a decade. (The C-50 survey is different from the American Housing Survey, despite the fact that both are conducted by the Census. As a result, the dollar figures cited here and those cited by Harvard's Joint Center for Housing Studies — which are often quoted by REMODELING — differ greatly.)
According to a press release from the National Association of Home Builders, the growth was spurred by rising home prices, and for a number of reasons. For one, homeowners have been able to take advantage of increased equity in their homes to remodel. Secondly, people are more likely to remain in their current homes and remodel them, rather than making the more substantial investment of buying new homes. And, due to increasing home values, the cost of remodeling projects is more easily — and more quickly — recouped. Also, the housing stock is at an age where many homes need repairs.
The NAHB Remodelors Council predicts much more modest growth for this year. In the press release, it predicted that home improvement activity would crack the $200 billion mark, but increase by just 6.3%.