Expenditures for home improvements are anticipated to decline in most of the nation’s 47 largest metropolitan areas this year in response to the economic impacts of the coronavirus (COVID-19) pandemic, according to new projections by the Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) of Harvard University.
Prior to the pandemic, the JCHS projected nearly all of the 47 tracked metros would see slowdowns in improvement spending through 2020. Through the JCHS’s standard methodology projections, 37 metros were projected to experience between 1% and 5% spending growth and nine metros were projected to experience spending declines.
Projections were revised based on the estimated effect of the COVID-19 pandemic on national remodeling spending. In its latest Leading Indicator of Remodeling Activity (LIRA), the JCHS forecast national expenditures on home renovations and repairs will decline at least through the first quarter of 2021. The COVID-19-adjusted projections for metros indicate annual remodeling spending will contract in 24 metros, while only 15 could see small gains (between 1% and 3%) relative to 2019 activity.
“With the pandemic exacerbating localized slowdowns in house prices, existing home sales, and homebuilding, many metros will see even more pronounced erosion of home renovation spending this year,” Abbe Will, associate project director in the Remodeling Futures Program, said in a public statement. “The largest remodeling spending is not isolated to any one region, but is projected to occur in markets throughout the country including Orlando, Kansas City, Omaha, San Jose, and Portland.”
Sophia Wedeen, research assistant in the JCHS’s Remodeling Futures Program, said annual gains in home improvement spending between 2% and 3% are projected for Cleveland, Ohio, Cincinnati, Ohio, Charlotte, N.C., Atlanta, Tampa, Fla., and Phoenix, Ariz. However, since the COVID-19 pandemic is still in its early stages, there is substantial uncertainty about how long the current economic downturn will last and how quickly a recovery will take hold.
