There are many agencies and groups that publish reports and provide data on the construction market. I find the most reliable source to be the U.S. Census Bureau. The bureau covers public and private work for new construction, which the Stucco Manufacturers Association uses to publish our market report (the 2024 version is due out soon). However, the Bureau does not have much data on the remodeling market. Most sources for this are the National Association of Realtors, the Joint Center for Housing Centers of Harvard University, and the U.S. Houzz & Home Study: Renovation Trends 2024. The remodeling market tends to be overlooked by the wall and ceiling industry. Most remodel work seems centered around kitchen and bath fixtures, tile and countertops. Does our industry assume this market is too small to put effort into? Could we be overlooking a hidden opportunity? 

Private construction has typically been the leader in all construction work. During the recession of 2008, private work dropped from a high of $900 billion annually to $500 billion in a few short years. Today, private work is at new record levels and approaching $1.5 trillion annually. Public construction tends to always remain stable for new work as it currently is at $400 billion annually in the U.S. Remodel work was estimated to be $328 billion in 2019 and then climbed to $485 billion at the end of 2021. This dramatic climb was attributed to COVID and homeowners wanting to do something useful as they were locked down. I suspect hiring outside contractors was also an issue. 

Most experts seem to agree that the remodel market will reach $500 billion for 2024 with a Compound Annual Growth Rate of 4.6 to 4.8 percent. Maybe we should be paying more attention to this market?

The news for remodeling contractors is confusing—or at least conflicting, looking at data from the National Association of Home Builders who publish the Remodeling Market Index. This is a survey of remodeling contractors across the country; they have reported a drop in work. How can this be? I suspect many homeowners have become DIYers due to TV programs showing viewers how to remodel. This might also explain why manufacturers strive to develop products that anyone can install.

Mixed Signals

The remodel/retrofit market continues to receive mixed signals. Zonda Research states that 40 percent of homebuyers want to avoid the hassles of doing a home renovation. However, home improvement experts predict a downturn in renovation and remodeling for 2024 and the near future. Yet the same experts note that the ROI may counter that trend of a downturn. Sellers that want to maximize the sale of their home know a renovation with a good ROI is the key. But what remodel efforts are proven to have an immediate ROI?

The NAHB has concluded the statement the RMI contracting market continues to be strong and healthy, even in the face of contractor skepticism. I tend to agree with the NAHB.

Other research states that most homes go through a significant remodel when they are between 20 and 40 years old. This could be useful information for contractors, dealers and manufacturers looking to target a specific market. For exterior siding contractors, the good news is siding, according to Home Depot, is one of the top four categories that have good, immediate ROI. Of course, the top spots go to kitchen and bath remodels.

There is a new trend in biophilic designs: this is a new millennial term that is meant to infer a better connection people have with nature. How does this play into remodels? More attention to outdoor spaces and the effort to tie the interior living space to the outside. This could include foldable exterior doors that can make your backyard part of your living room, or more natural and green-friendly products. This trend can include biomorphic forms and patterns. This is in reference to contoured, patterned, textured or numerical arrangements that persist in nature. Is this a fad or the long-term future? We will have to wait and see.

If you are a contractor looking to enter the remodeling market, be very careful. Remodel work is full of unknowns, and most are hidden from you. When you start knocking down walls, you might find leaks, mold and other surprises. Be careful about submitting a firm bid price without any caveats for unknown surprises. Clarify your bid carefully on what you have anticipated under work to be done. Homeowners stretching their dollars, do not like hearing your bid cannot cover the new or undetected scope of work. It is because of past experiences; some subcontractors only do remodel work on a time and material basis. Prep work is always more expensive for a remodel than new construction.