2020 was an interesting year for the residential remodeling market in the US. Expectations of growth receded as the COVID-19 pandemic reached every corner of the economy. However, the market soon recovered as homeowners – either on their own or with the help of professionals – engaged in a wide range of improvement projects. From adding home gyms and offices to installing the decks and pools needed for the family staycation, homeowners undertook many projects that spurred demand for lumber and a wide range of other building materials (trends that were frequently mentioned on this site).
According to The Freedonia Group National Online Consumer Survey (conducted November – December 2020), 39% of respondents reported undertaking home improvement projects because of changes associated with the coronavirus pandemic, while 32% reported delaying home improvement projects for the same reason.
The question for many in the industry now is: What will the residential remodeling market hold for 2021? Two recent articles imply that the market for 2021 will resemble that of the second half of 2020.
The first – a survey of remodelers sponsored by the National Association of Home Builders – showed that confidence was high among respondents. Indeed, the survey showed that contractors who specialized in small- and medium-sized jobs (those costing $50,000 or less) had higher confidence than those who mainly performed large-scale work. This shows that while some are leery of attempting larger remodeling projects, homeowners – and their budgets – are confident in performing more economical jobs (such as remodeling a bathroom or installing new floors) to improve the look and boost the value of their residences. This caution is found in The Freedonia Group National Online Consumer Survey (conducted November – December 2020) as 41% of respondents reported that the pandemic has negatively affected their personal job situation and 47% reported that it negatively affected their ability to make larger purchases.
A second article also demonstrates the strength of the residential improvement and repair market, reporting that home improvement spending is anticipated to increase in 2021. Those Americans who saw their economic conditions improve in 2020 will be able to spend more on their homes, while others will take advantage of a favorable lending environment to do so. Furthermore, the prospect of widespread vaccine availability will boost consumer confidence while making it easier for work crews to enter homes and complete large-scale projects, such as kitchen remodeling.
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.