Residential Remodeling in Top Metros to Accelerate in 2022
CAMBRIDGE, MA – Expenditures for improvements to the owner-occupied housing stock are expected to increase at a faster pace in most of the nation’s largest metropolitan areas this year, according to projections released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Projections for 2022 show a robust average annual growth in home improvement spending of 13.8 percent across all 48 major metropolitan areas tracked, with owner expenditures expected to grow between 7.6 percent and 23.0 percent. Of these metros, 20 are expected to see above average growth of 14 percent or greater with six metros surpassing the projection for national remodeling spending of 17 percent growth this year. All but one of the metros tracked show higher growth projected for 2022 compared with 2021 estimates.
“Record-breaking home price appreciation, solid home sales, and high incomes are all contributing to stronger remodeling activity in our nation’s major metros, especially in the South and West,” says Sophia Wedeen, a Research Assistant in the Remodeling Futures Program at the Center. The largest gains in home improvement spending this year are projected to occur in Tucson (23.0 percent), Riverside (21.9 percent), Phoenix (20.3 percent), Austin (19.2 percent), San Antonio (19.1 percent), and Las Vegas (17.5 percent).
“Although home remodeling is expected to accelerate broadly across top metros, ongoing shortages and rising costs of labor and building materials may dampen activity in the coming year,” says Carlos Martín, Project Director of the Remodeling Futures Program. “There will be shifts in local supply chains and the remodeling workforce as regional economies pull out of the pandemic, and as homeowner needs and activities change.”
Note: Due to data discontinuation, the 2022 metro projections substituted total existing home sales for existing single-family home sales as a model input. More information about the impact of this substitution on the input correlations and weights can be found in this spreadsheet.
The Joint Center for Housing Studies’ Metro Area Home Improvement Projections are released annually in the first quarter and provide a short-term outlook of home improvement spending to owner-occupied homes in approximately 50 of the largest US metropolitan areas. The indicator, developed with biennial estimates from the American Housing Survey, is designed to project the annual rate of change in spending for the current quarter and subsequent three quarters, and is intended to help identify future turning points in the local business cycles of the home improvement industry.
The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.
The Harvard Joint Center for Housing Studies advances understanding of housing issues and informs policy. Through its research, education, and public outreach programs, the Center helps leaders in government, business, and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Center also trains and inspires the next generation of housing leaders.
Contact: Kerry Donahue, (617) 495-7640, [email protected]