Residential remodeling spending could decrease in 2020
NAHB says the labor shortage continues to hold back strong growth.
LAS VEGAS – Spending on residential improvements will continue to grow over the next two years at a gradual pace, according to the National Association of Home Builders (NAHB).
But not before a slight drop in spending.
The NAHB has forecast that remodeling spending for owner-occupied single-family homes will decrease by 0.6% in 2020 and increase by 1.2% in 2021. The prediction for spending was given here at the International Builders’ Show being held at the Las Vegas Convention Center.
“Remodeler certainty continues to remain at a high level, as remodeling spending reached $158 billion in 2019,” said 2019 NAHB Remodelers Chair Tim Ellis. “Although there is steady consumer demand in all areas of the country, the biggest challenge continues to be the cost of and lack of skilled labor to meet the interest.”
“We’re not only seeing more requests for proposals because the housing stock is limited, but also a higher request for aging-in-place work because boomers want to stay in their homes longer,” said Nick Scheel, a remodeler from Spokane Valley, Wash. “Because people are choosing to stay in their homes, the demand and backlog for remodeling remains high.”
“The biggest factors prohibiting stronger growth is mainly the ongoing labor shortage,” said Paul Emrath, NAHB’s assistant vice president for Surveys and Housing Policy Research.
Although the economy is slowing slightly, the risk of a recession is low and remodeling should keep pace with inflation into 2021, the NAHB said.
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