There is a current boom in home remodeling in the U.S., which is expected to grow at a faster pace as we head into 2022.

Expenditures on home improvements, remodeling, and repairs could reach $430 billion by mid-year, but signs point to some easing of growth by the end of the year, according to the Leading Indicator of Remodeling Activity (LIRA) by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

The LIRA projects double-digit gains in annual homeowner renovation and maintenance spending will top out in the third quarter of 2022 before beginning a deceleration toward more sustainable rates of growth.

“Strong increases in home sales activity, household incomes, and home equity levels are supporting a faster expansion of the home remodeling market over the coming year,” says Carlos Martín, Project Director of the Remodeling Futures Program at the Center.

“As owners continue to navigate the ups and downs of the pandemic’s trajectory, the focus on home improvements for changing wants and needs remains in sharp relief.”

“While annual owner improvement and repair spending could reach $430 billion by the second half of 2022, several headwinds may still temper growth expectations this year,” says Abbe Will, Associate Project Director of the Remodeling Futures Program.

“The rising costs of labor and construction materials, difficulty retaining contractors, and climbing interest rates could discourage owners from undertaking new or larger remodeling projects.”

Experts have pointed to inflation and related manufacturer behavior as reasons for the increases for both new residential construction and remodeling, at 23.2 percent and 22.1 percent.

Materials such as lumber and plywood saw price increases that doubled one year into the pandemic but has come back down. Other materials, like glass, drywall, and plastic construction products saw sharper price increases than other materials during this time, according to JCHS.

Labor shortages continue to cause problems for remodeling contractors. Job openings have been steadily rising since the pandemic’s start and are higher than at any time in the last two decades.

Source: www.jchs.harvard.edu.

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