Homeowners Spend $133 Billion to Remodel

REALTOR� Magazine - Daily News

Homeowners Spend $133 Billion to Remodel

(July 25, 2005) — Homeowners made big investments in their homes over the past year, shelling out nearly $133 billion on home improvements and repairs, according to the Remodeling Activity Indicator devised by the Joint Center for Housing Studies at Harvard University.

Home improvement spending rose 4.5 percent during the second quarter of 2005 compared with the year-earlier period, the indicator shows. Industry experts say the booming housing industry has fueled the increase in remodeling.

“Favorable long-term interest rates have kept home sales strong, and housing turnover traditionally is a big motivator for remodeling activity,” says Kermit Baker, director of the Remodeling Futures Program of the Joint Center.

Nicolas P. Retsinas, director of the Joint Center, says he expects growth to continue at a steady rate.

“Over the past decade, remodeling spending has increased approximately 5 percent per year,” he says. “Notwithstanding a surge in spending at the end of 2004, our recent estimates show stable growth.”

The Remodeling Activity Indicator was developed to provide an accurate and timely reading of national remodeling activity levels. Since 1995, the Joint Center has been conducting a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States.

With remodeling activity approaching the level of new home construction, it also represents a critical investment in maintaining the nation’s housing stock, the Joint Center says.

—REALTOR® Magazine Online