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Blog: Residential Construction and Remodeling Projections

By Brooke C. Stoddard

The National Association of Home Builders (NAHB) released a report in the spring called What Home Buyers Really Want1 based on thousands of interviews with recent and prospective homebuyers. Energy-savings seems to be much on their minds. “Most wanted” in a home were energy efficiency and storage space. The energy savings consumers were looking for took the shape of appliances and windows. Ninety percent said they preferred a highly energy-efficient home with lower utility bills to a home costing 2-3% less but without such features. Ninety-one percent wanted an energy-star rating for the whole home.

According to the NAHB, homeowners want a home of 2,226 square feet, up from the median 1,906 they recently sold or have now. Consumers indicated they focus on quality and appearance in choosing components such as flooring and counters; when looking for appliances they tend more to concentrate on quality and brand name.

Asked about essentials in a bath, the top three were an exhaust fan, a linen closet, and a shower and tub in the master bath. For special features in a home, the respondents placed outdoor lighting very highly (59% rated it essential or desirable) as well as an electronic air cleaner (52% answered essential or desirable).

Half of respondents wanted a wireless security system, 15% having or having had them in their old homes, and 40% wanted security cameras, up from 7% having or having had them in their old homes. Only 10% said they would install electronic and technology systems themselves, the remainder intending to hire professionals.

In other reports, the NAHB said that the median size home being built in 2012 was the highest ever, more than 2,300 square feet (size dipped after the housing crisis of 2008-2009, but then rebounded).

The NAHB is optimistic about current and future construction. Figures released in September for August showed single-family starts leading the way to an overall increase of 0.9%. This translates to a seasonally adjusted 891,000 starts of single-family and multifamily dwellings per year. Multi-family starts were not as robust as the single-family ones, but NAHB spokespersons said the general numbers reflect “a gradual improvement in buyer confidence in the overall market and indicate a solid outlook for single-family production.” Single-family starts increased 9.6% in the Northeast, 7.1% in the Midwest, 2.3% in the South, and 17.5% in the West. Permits for future construction also showed gains. Ones for single-family homes rose 2.9% in the Midwest, 2.5% in the South, and 5.3% in the West while remaining flat in the Northeast.

The number of all housing starts in 2012 was 780,000, which was the highest in four years, low by measures from five and six years ago but capping a rising trend. Demographics seem to support the notion of continued good numbers for housing. Some estimates are that almost three in 10 persons aged 18 to 35 are living at home with their parents; they will soon be wanting homes of their own.

In addition to reports by the NAHB, the trade association for remodelers, the National Association of the Remodeling Industries (NARI), published optimistic forecasts for residential and light commercial remodeling. Remodelers reported their highest rating for business conditions in six months, a lift to 6.41 from 6.31 during the previous quarter. NARI said nearly all categories of its survey were higher, including inquiries for renovation work, conversion of bids to contracts, and value of contracts. Pent-up demand is said to be the driver of renewed interest. Homeowners also told remodelers that they were choosing remodeling now in order to increase the value of their homes and that they were more optimistic than previously about their futures.

1For information on the report, go to nahb.org

Brooke C. Stoddard is an Alexandria, Virginia-based writer covering business, manufacturing, energy, and technology.

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