According to Harvard University’s Joint Center for Housing Studies, spending on home remodeling in the first quarter will jump to $125.1 billion, up 9.2% from $114.6 billion last year earlier, with a 13% percent increase forecast for April through June 2011 — if so, the largest jump in five years. This is far brighter than the six-year low of $112 billion in 2009. The study noted that spending on renovations may increase 3.5% per year through 2015.
The National Association of the Remodeling Industry noted that the 65-year-old baby boomers will drive the growth as they seek better lighting, less barriers, and more things in convenient locations.
That’s good news for a variety of small contractors and also for Home Depot, the largest US home-improvement retailer, which forecast earnings per share (excluding some items) will jump up to 9.5% in 2011. The average Home Depot purchase jumped 2.6% in the fourth quarter, the most in more than four years, though cautious consumers still favor small improvements rather than major renovations.