February 19th, 2019
As New Homes Slow, Expect More Remodeling
We may live in an age where banners for “Breaking News” seem to permanently occupy a spot on our TV screens, but those headlines often matter less over the long run than deeper, more subtle truths. This is something door and window manufacturers need to keep in mind as they decide where and how to invest their efforts over the next few years.
For instance, while CNBC and others focus on what’s happening with new home construction, repair and remodeling work rarely gets mentioned during their conversations about housing. This occurs despite the fact that the one million-plus new homes started every year constitute a mere sliver of the roughly 137 million homes in this country. Add up all the homes built since the Great Recession and you still account for, at most, no more than 5 percent of the entire U.S. housing stock.
Consider this, too: The percentage of occupied homes in the U.S. that are age 45 years or older has jumped in 2015, to account for 38 percent of the entire housing stock, up from 32 percent in 2005, according to the National Association of Home Builders’ analysis of federal data. While NAHB sees this as proof of a crying need for building new homes, door and window manufacturers should regard this as a growing opportunity to take advantage of the natural deterioration that comes when a home is used for many decades.
Lots of other long-term data reports also point to R&R as deserving more attention. The Census Bureau says people aren’t moving as often as they did a few decades back. Aging in place has become common, as has a return to multiple generations living under the same roof (particularly with Asians, African Americans and Hispanics). And just about any initiative anywhere to improve a home’s energy efficiency includes a section on installing thermally efficient windows.
Housing experts’ latest predictions for new construction call for a slowdown to within perhaps a couple of percentage points’ worth of increased starts this year. For the general economy, these same experts believe there will be zero growth or perhaps a small, brief backslide starting in 2020. But remodeling will keep growing, they say. NAHB predicts a 4 percent increase this year, while the Joint Center for Housing Studies of Harvard University believes spending will grow 5.1 percent. Likewise, Metrostudy says conditions are ripe for continued steady growth.
Remodeling isn’t recession-proof, but it has so many long-term factors in its favor that it’s a much safer bet for growth than new-home construction over the next few years. Too bad this part of the industry doesn’t get the attention it deserves.