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The new home construction market, rightfully so many times, generates a lot of news coverage.
But Todd Tomalak, an economist for Irvine, Calif.-based John Burns Real Estate Consulting, wants to shine the light on the remodeling sector, which is often overshadowed by anything “new.” One reason is new home starts and related data is easier to track and forecast than the fragmented remolding industry.
In Tomalak's forecasts, remodeling, after a few years of tepid growth, is on the mend. “We are starting to see a pivot,” Tomalak tells Coffee Talk.
Overall, according to a recent report from Tomalak, repair and remodeling spending nationwide should grow 7.8% in 2016, “with strong growth thereafter.”
“Barring a recession, we see little downside in the U.S. repair and remodeling industry, which totaled $266 billion last year,” the report adds. “If mortgage rates rise, which would hurt new home construction, we believe remodeling will benefit as move-up home buyers stay in their existing home with a low-rate fixed mortgage and tap their home equity line to remodel instead of moving.”
The industry, adds Tomalak, will get a boost from both small projects, which tend to cover about $5,000 or less, and bigger projects.
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