Remodeling poised for growth
The U.S. home improvement industry is poised for growth, according to a new report released today by the Joint Center for Housing Studies at Harvard University.
The report, “A New Decade of Growth for Remodeling,” is the sixth and latest report in the Improving America’s Housing series, published by the Remodeling Futures Program at the Joint Center.
“As both the economy and the housing market stabilize, so too will homeowner improvement spending,” said Abbe Will, a researcher with the Remodeling Futures Program.
According to the report, remodeling expenditures are expected to increase at an average annual rate of 3.5%, below the pace during the housing boom, but sharply recovering from the recent downturn.
Market fundamentals, such as the number of homes in the housing stock, the age of those homes and the income gains of homeowners making improvements, all point to increases in the industry that has seen double-digit decline since its peak in 2007.
“Metropolitan areas with rising house prices, older housing stocks, higher incomes and home values, and a larger share of upscale remodeling expenditures, such as Boston, San Francisco and Los Angeles, are well-positioned for an upturn in remodeling activity,” said Eric Belsky, managing director of the Joint Center.
The report anticipates that in the next five years the majority of remodeling spending will shift from upper-end discretionary projects to replacements and systems upgrades. Further, it points to a number of growth opportunities generated by underinvestment in distressed properties, lower mobility, changing migration patterns and the rise of environmental awareness.
“Lower household mobility following the housing market crash means that in the coming years homeowners will increasingly focus on improvements with longer paybacks, particularly energy-efficient retrofits,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “Also, a slowing of migration to traditionally fast-growing Sunbelt metro areas means that, at least temporarily, more remodeling spending will remain in older, slower-growing areas in the Rustbelt and in California.”
NAHB forecasts 20% growth in starts
Orlando, Fla. — The annual Housing and Economic Outlook at the 2011 International Builders’ Show had some relatively good news for attendees.
A disappointing 2010 is expected to serve as a platform for a take off in 2011, according to David Crowe, chief economist and senior VP at the National Association of Home Builders (NAHB). Crowe and the NAHB forecast 708,000 total housing starts this year, up about 20% from an estimated 589,000 in 2010. The NAHB expects single-family housing starts to increase 21% to 575,000.
Crowe pointed to housing affordability, demographic forces and pent-up demand as three key factors that will affect growth residential construction. "It’s only so long that a 30-year old can live in his mom’s basement," he said.
Crowe’s forecast was backed by a second economist on the panel, Frank Nothaft, chief economist for Freddie Mac. Nothaft sees the economy as "strengthening and accelerating" in 2011. The Freddie Mac economist also forecast unemployment to finish 2011 at the 9.0% level, down from the current 9.4%.
Disruptive weather prevented a third economist, David Berson of the PMI Group, from arriving in Orlando in time for the session.
Hearthstone Homes to use Typar Fiberweb
Omaha, Neb.-based HearthStone Homes has named Typar Fiberweb as its new housewrap in accordance with its commitment to build only Energy Star-qualified homes.
The company said it chose the housewrap manufacture after an evaluation of Typar’s performance data and Fiberweb’s manufacturing processes.
“Fiberweb is extremely well versed in helping builders create Energy Star homes, and we are confident Typar will enhance what we are doing to address air infiltration,” said Scott Kinkaid, VP innovation at HearthStone Homes. “When we toured their facility, it was evident that they weren’t simply accepting that they had a good product, but were instead constantly looking for ways to make it even better.”
HearthStone Homes now uses the Typar Weather Protection System as part of the strategy to make its homes more energy efficient.