Remodeling activity is expected to expand in the first quarter of 2013 by 12.2%, to an estimated $126.9 billion, over the same quarter this year, according the latest projections that the Joint Center for Housing Studies at Harvard University released on Thursday morning.
That growth projection comes despite a dip in remodeling activity in the second quarter of this year, primarily due to the unusually warm weather around the country (see chart). The Joint Center foresees a slight rebound in the third quarter and then big jumps in remodeling activity over the proceeding six months.
“By the end of the year, positive market fundamentals are expected to kick in, moving the industry into a new growth phase,” predicts Eric Belsky, the Joint Center’s managing director.
Those “fundamentals” include low financing costs, stronger consumer confidence, improving home sales, “and the perception that home prices have stabilized in most markets across the country,” explains Kermit Baker, director of the Joint Center’s Remodeling Futures Program.
The Joint Center’s projections follow the latest release of the BuildFaxRemodeling Index, which estimates that permits issued nationally in May specifically for remodeling projects, at 2,662,680, were 5.6% higher than the same month a year ago.
Another promising sign for future remodeling activity is evident in a recent poll of homeowners conducted by the National Associationof the Remodeling Industry, which found 87% saying they intend to stay in their houses from one to 20 years longer than they expected to before the economic downturn. More than a quarter of those polled say they intend to stay in their houses for another 16 to 20 years.
John Caulfield is senior editor for Builder magazine.