Hot metro markets for this year

Market Insights

Joint Center points to hot metro markets

TUCSON, ARIZ., EXPECTED TO LEAD THE CHARGE IN HOME IMPROVEMENT SPENDING

Home improvement spending could see sizable increases in metro markets this year.

The Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) of Harvard University projects 2022 to show a robust average annual growth in home improvement spending of 13.8% across all 48 major metropolitan areas tracked.

Additionally, owner expenditures are expected to grow between 7.6% and 23% with 20 markets expected to see above-average growth of 14% or better. Another six markets could see spending grow by 17% this year with all but one of the metros tracking for higher growth in comparison to 2021 estimates.

“Record-breaking home price appreciation, solid home sales, and high incomes are all contributing to stronger remodeling activity in our nation’s major metros, especially in the South and West,” said Sophia Wedeen, a research assistant in the Remodeling Futures Program at the Center.

The largest gains in home improvement spending this year are projected to occur in Tucson (23%), Riverside (21.9%), Phoenix (20.3%), Austin (19.2%), San Antonio (19.1%), and Las Vegas (17.5%).

“Although home remodeling is expected to accelerate broadly across top metros, ongoing shortages and rising costs of labor and building materials may dampen activity in the coming year,” noted Carlos Martín, project director of the Remodeling Futures Program. “There will be shifts in local supply chains and the remodeling workforce as regional economies pull out of the pandemic, and as homeowner needs and activities change.”

The JCHS noted that due to data discontinuation, the 2022 metro projections substituted total existing home sales for existing single-family home sales as a model input.

The research followed close on the heels of a JCHS’s Leading Indicator of Remodeling Activity report that projected double-digit gains in annual homeowner renovation and maintenance expenditure will top out in the third quarter of 2022 before beginning a deceleration toward more sustainable rates of growth.

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