Passing $200 billion for the first time, Americans spent an estimated $210 billion on residential remodeling in 2005, based on the National Association of Home Builders’ (NAHB) analysis of recently released third-quarter remodeling spending from the U.S. Census Bureau. In addition, the NAHB Remodelors Council forecasts the largest increase in spending in 2006 in more than 10 years to a record $238 billion, a 13.2 percent jump.
"The devastating 2005 hurricanes, combined with a rebound in the rental market, are expected to spur a historically high increase in spending this year as repair work proceeds in the Gulf states and apartment owners renovate properties to maximize rental income," said Vince Butler, chair of NAHB’s Remodelors Council and a home remodeler from Clifton, Va. "The massive owner equity and low refinance rates that fueled recent growth will continue to drive strong expansion."
The record industry growth forecast for 2006 is more than double the pace of growth in 2005, when remodeling spending grew by 5.8 percent, in line with average annual growth of 5.3 percent from 1994 to 2004. The previous growth record was posted in 2004, when spending jumped 12.2 percent due to a strong increase in the real estate market.