Remodeling Market Reaching New Heights

According to a report released in January 2015 by the Harvard University Joint Center for Housing Studies, the remodeling market has reached new heights. Kermit Baker, director of the center’s remodeling futures program, forecasts that spending in the U.S. remodeling market will grow by 4% to 5% this year to at least $330 billion, spanning work on both owned homes and rentals. That’s a slower growth rate than in previous years of the recovery, but it would be enough to make 2015 the richest year for remodeling spending of the past 15, surpassing the previous high point of $324 billion in 2007.

“The market is largely recovered,” Mr. Baker said. “It will resume growth at its historical level, which has been (an average of ) just about 5% year over year for the past 30 years.” The main reason: A similar easing of home-price appreciation. The median resale price of existing homes last month of $209,500 marked a 6% increase from a year earlier. In comparison, the increase in 2013 was nearly 10%. Homeowners are less likely to push ahead with an ambitious, pricey renovation if their home equity isn’t growing as rapidly anymore. – WSJ, January 2015

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