While the U.S. housing market continues to recover in fits and starts, the home improvement industry is on a roll, according to a new report from the Joint Center for Housing Studies of Harvard University.
The researchers found that strong demand for remodeling could push spending on home improvement to record levels this year, even as the pace of new residential construction remains well below prebust levels.
The improvement boom comes as many would-be trade-up buyers have decided to stay put and fix up or expand their existing homes, the researchers said. Federal and state subsidies for energy-efficient upgrades have also helped. And landlords looking to find new tenants or raise rents have spruced up rental properties.
A stronger job market and increased consumer confidence may also be spurring homeowners to get started on a project they deferred when the job market was weaker. That may help explain why spending on discretionary home improvements rose by almost $6 billion between 2011 and 2013, the first increase since 2007.
Some parts of the country have a greater inclination to fix up than others.
In Washington, D.C., and Boston, homeowners shelled out nearly $5,000 a year on average for remodeling. Homeowners in Las Vegas spend about $1,700. Owners in metro areas spent 50 percent more on improvement projects on average than their nonmetro counterparts, primarily because of higher incomes and home values, the study said.
Homeowners in D.C., Memphis and Boston were more likely to rely on professionals to get the work done, hiring the pros for 90 percent of the work they had done. Las Vegas and Houston homeowners are apparently a little handier with a hammer: They spent roughly 22 percent of their remodeling budgets on do-it-yourself projects.
In some areas, those professionals may be harder to find than during the go-go building boom that preceding the 2008 housing collapse.
Smaller remodelers—the ones who survived the bust—have been slowly rebuilding their payrolls.
But many skilled workers have since found other lines of work. Aside from freshening up a kitchen or adding a new bathroom, the remodeling industry is finding at new lines of growth.
Baby boomers are retrofitting their homes for better accessibility and other age-appropriate features.
Improvements' energy-efficient components—from windows to heating and cooling systems—are also keeping remodeling contractors busy. And while the millennial generation has proven to be less enamored with home ownership than prior American generations, the boom in demand for rental units has helped boost spending by landlords on fixing up apartments and rental housing, the researchers said.
This article originally appeared in CNBC.
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