NAHB Says Remodeling Recovered Despite Prices
The National Home Builders Association recently dubbed the home remodeling market “more than fully recovered” from the COVID-19 pandemic. The comments were made during an online press conference hosted by the association during the 2021 International Builders’ Show virtual experience earlier this month.
In addition to looking at current numbers, the NAHB forecasts that the residential improvements sector will continue to grow at a healthy pace for the next two years.
“After the dip at the beginning of the pandemic, remodeler confidence bounced back, and it continues to remain at a high level, as remodeling spending is expected to reach $285 billion in 2021,” said Vince Butler, CAPS, CGR, GMB, GMR, a remodeler from Clifton, Virginia.
“There is steady consumer demand as Americans are at home much more during the pandemic. This gives homeowners more time and a desire to invest in their homes.”
More specifically, over the next two years the NAHB predicts that remodeling spending for owner-occupied, single-family homes will increase 4% this year and another 2% next year.
Other professionals at the event moted that demand and backlog remain high, and the biggest factors that are prohibiting the sector to grow more are materials prices and labor shortages.
More Material Data
The material costs have been a recent topic of conversation with new statistics recently released from the Bureau of Labor Statistics’ Producer Price Index.
On the costs, the NAHB has said that the demand has helped to offset the supply chain challenges and keep business confidence up, though it’s recognized that this is hiking up the cost of homes.
“Lumber prices have been steadily rising this year and hit a record high in mid-February, adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are already at all-time lows,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Florida. “Builders remain very focused on regulatory and other policy issues that could price out households seeking new homes in a tight market this year.”
Earlier this week, the NAHB released its own new estimates on lumber, noting that price have increased more than 180% since last spring, causing the price of an average new, single-family home to increase by $24,386 and the market value of the average new multifamily home to increase by $8,998.
According to the NAHB, the association calculated these increases based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs.
Included is any softwood used in structural framing, sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.