Home Remodeling Activity Strong, Houzz Barometer Finds
PALO ALTO, CA — Confidence over the current and future market for home renovation activity remained high among residential construction and design businesses in the second quarter of 2021, following a strong first quarter, according to Houzz, the online platform for residential remodeling and design.
According to the Q2 2021 Houzz Renovation Barometer – which tracks residential renovation market expectations, project backlogs and recent activity among businesses in the nation’s construction, architectural and design services sectors – market conditions remain “strong … diminishing the uncertainty experienced by residential remodeling and design businesses just one year ago.”
“Following a busy first quarter, businesses are faced with soaring homeowner demand along with lengthy permitting timelines, supply chain constraints and unrelenting labor shortages,” said Marine Sargsyan, senior economist for the Palo Alto, CA-based Houzz, noting that existing supply chain restraints are likely contributing to industrywide wait times of more than two months before a business can begin a new project.
Home renovation and design businesses have continued to respond to pandemic-related business challenges by implementing new tools and practices, Houzz also reported. Specifically:
• Approximately one-third of surveyed businesses in the architectural and design services sector, as well as the construction sector, have increasingly adopted online invoicing and payments.
• Architecture and design firms reported that the top three activities they implemented in response to pandemic-related challenges included video consultations, new safety guidelines at the office and worksite and remote collaboration tools.
• Construction businesses reported that the top three activities they adopted in response to pandemic-related challenges included new safety guidelines, online product sourcing and digital tools for document and contract approvals.
Houzz Renovation Barometers are based on quarterly online surveys sent to a national panel of businesses with an online profile on Houzz. The Q2 2021 Barometer was fielded from March 25 through April 8, and garnered responses from nearly 1,500 home improvement, according to Houzz.
In related news:
• The National Association of Home Builders released its Remodeling Market Index for the first quarter of 2021, posting a reading of 86, up 38 points from the first quarter of 2020 and signaling “residential remodelers’ confidence in their markets for projects of all sizes, the NHAB said.
“The large year-over-year increase in the RMI signals a very strong recovery in remodeling activity since the onset of the pandemic, and activity should continue to grow into 2021 as the economy accelerates with an easing of the pandemic,” said NAHB Chief Economist Robert Dietz, adding, however, that material availability and prices continue to be a challenge for remodelers and their customers.
• Growth in improvement and repair expenditures to owner-occupied homes is expected to remain solid throughout this year and into 2022, according to the Leading Indicator of Remodeling Activity (LIRA) released last month by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The latest quarterly LIRA projects a healthy pace of mid-single digit gains in annual home renovation and repair spending this year, with 4.8% growth by the first quarter of next year.
“With a financial boost from recent federal stimulus payments and strong house price appreciation, homeowners are continuing to invest in the upkeep and improvement of their homes,” said Chris Herbert, managing director of the Cambridge, MA-based Joint Center for Housing Studies. “This lift in incomes and ongoing strength of the housing market are providing homeowners incentives to make even greater investments in their homes this year.”