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The remodeling industry saw strong demand throughout 2021 despite supply chain problems and rising costs, according to experts at a press conference hosted by the National Association of Home Builders (NAHB) Remodelers at the NAHB International Builders' Show (IBS) in Orlando.
The NAHB/Royal Building Products Remodeling Market Index (RMI) showed continued year-over-year improvement in remodelers' sentiment, with index levels at well above break-even point of 50.
"Higher home equity and historically low interest rates provided resources for home owners to improve their existing homes, helping to support the high demand for remodeling projects," said NAHB Assistant Vice President for Surveys and Housing Policy Research Paul Emrath.
Lumber prices continued to move higher, up 218 percent in the past five months to $1,238 per thousand board feet. Over the past 12 months, according to the Producer Price Index from the U.S. Bureau of labor Statistics, gypsum prices increased 21 percent.
Another issue impacting the remodeling industry is the lack of skilled labor, which leads to delays in completing remodeling projects. There were 345,000 open construction positions in November 2021, noted Emrath.
"Despite delays and higher costs due to supply chain problems, demand for remodeling remains high," Emrath said. "Looking ahead, we expect to see continued growth in the remodeling market in 2022 and 2023, although not as strong as 2021."
Steve Cunningham, CAPS, CGP, 2021 NAHB Remodelers Chair and president of Cunningham Contracting Inc. in Williamsburg, Virginia, said that not only is a lack of labor an issue, but so are material shortages. For example, he has seen a 6-month wait for cabinets to be delivered.
Discussing popular projects during the COVID pandemic, Cunningham said that "he expects that outdoor spaces, home offices and flex spaces will continue in the years to come, and the next wave of projects will include multi-generational living."
Matthew "Matt" Emmons, CGR, president of Emmons Construction LLC in Jenks, Oklahoma, said he has seen "a steady flow of work in all aspects of our industry." He said that "every sub, vendor and supplier is as busy as they've ever been. I think the concern moving forward is timing for completion and keeping quality at a premium during all the chaos of supply chain issues and labor shortages."