Spending on Remodeling Soars Nationwide

By: Robyn A. Friedman: REALTOR® Magazine Online
Americans spent an estimated $210 billion on residential remodeling last year, an all-time high, according to the National Association of Home Builders.

The NAHB Remodelers Council forecasts a 13.2 percent jump in remodeling spending this year, to a record $238 billion, the largest increase in spending in more than 10 years.

Three things are driving growth in remodeling. Low interest rates encourage home owners to do cash-out refinances, which provide cheap funds for home repairs or renovations. Second, the active 2005 hurricane season forced the need for repairs, particularly in the U.S. Gulf Coast states. Third, a resurgence in the rental market has encouraged many apartment building owners to update their properties to maximize rental income.

Regionally, more remodeling is done in the South than in other parts of the nation; it accounts for 31 percent of all spending on remodeling. The highest per-household spending, however, occurs in the Northeast. The residential remodeling market accounts for about 40 percent of all home construction, the NAHB says.