Sunbelt Metros to See Strongest Home Remodeling Growth in 2021

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CAMBRIDGE, MA – Expenditures for improvements to the owner-occupied housing stock are expected to increase in nearly all of the nation’s largest metropolitan areas this year, according to projections released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Following a pandemic-induced slowdown, projections for 2021 show annual home improvement spending growing from 1–13 percent in 42 major metropolitan areas, while declining modestly at 1.5 percent or less in four of the 46 metros tracked. Collectively, large metro areas are expected to see stronger remodeling gains in 2021 with an average growth of almost 5 percent compared to an estimated gain of 2 percent in 2020. Fully 14 metros are projected to see robust growth above 6 percent this year, while an additional 17 metros are set for moderate gains between 3 and 6 percent.

“Broad strength in house price appreciation, existing home sales, and residential construction suggest that many metros will see greater renovation activity this year,” says Abbe Will, Associate Project Director in the Remodeling Futures Program at the Center. “The largest remodeling spending gains are projected to occur in relatively more affordable metros in the Sunbelt, with over 9 percent growth expected in Oklahoma City, Tucson, Charlotte, Phoenix, and San Antonio.”

“Although home remodeling is a bright spot in the economy overall, owner improvement spending is projected to contract slightly in a few high-cost metropolitan areas including New York, Denver, Boston, and San Jose,” says Sophia Wedeen, a Research Assistant at the Center. “While other higher-cost metros—Washington, DC, Miami, San Francisco, Los Angeles, and Seattle—are expected to have only modest levels of spending growth between 1 and 3 percent this year.”

The Joint Center for Housing Studies’ Metro Area Home Improvement Projections are released annually in the first quarter and provide a short-term outlook of home improvement spending to owner-occupied homes in approximately 50 of the largest US 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 three quarters, and is intended to help identify future turning points in the local business cycles of the home improvement industry.

The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.

The Harvard Joint Center for Housing Studies advances understanding of housing issues and informs policy. Through its research, education, and public outreach programs, the Center helps leaders in government, business, and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Center also trains and inspires the next generation of housing leaders.

Contact: Kerry Donahue, (617) 495-7640, [email protected] 

San Antonio photo/Brandon Watts