Pandemic Expected to Shrink 2020 Remodeling Spending in Majority of Top Metros
Expenditures for home improvements to the owner-occupied housing stock are anticipated to decline in most of the nation’s largest metropolitan areas this year in response to the severe economic impacts of the COVID-19 pandemic, according to new projections released today by our Remodeling Futures Program.
Even before the pandemic hit, nearly all of the 47 tracked metros were expected to see slowdowns in improvement spending through 2020 as generated by our standard methodology projections, with growth of 1-5 percent expected in 37 metros and declines in only 9 metros. Revising these projections based on the estimated effect of the pandemic on national remodeling spending, the COVID-adjusted projections, illustrated in the interactive map below, show annual homeowner remodeling spending will likely contract in the majority of metros (24), while only 15 could still see gains (1-3 percent), relative to 2019 activity.
With the pandemic exacerbating localized slowdowns in house prices, existing home sales, and homebuilding, many metros will see even more pronounced erosion of home renovation activity this year. The largest remodeling spending declines are not isolated to any one region, but are projected to occur in markets throughout the country including Orlando, Kansas City, Omaha, San Jose, and Portland.
Although the pandemic is lowering prospects for remodeling everywhere, relatively more affordable metros in the Midwest and Sunbelt should be among the brighter spots for home improvements this year with annual gains of about 2-3 percent in Cleveland and Cincinnati, as well as Charlotte, Atlanta, Tampa, and Phoenix.
With the country still in the early stages of the COVID-19 pandemic, there is substantial uncertainty about how long the economic downturn will last and how quickly a recovery will take hold. As more and more data become available, we will continue to provide insights and analysis for understanding the varied impacts of the pandemic on local and regional home improvement activity.
The Joint Center for Housing Studies’ Metro Area Home Improvement Projections are released annually in the Spring and provide a short-term outlook of home improvement spending to owner-occupied homes across approximately 50 major metropolitan areas. The indicator, developed with biennial estimates from the American Housing Survey, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the local business cycles of the home improvement industry.