U.S. Consumers Take On Renovations

The National Association of Homebuilders (NAHB) predicts that U.S. multifamily starts will fall this year, but U.S. renovation spend will continue to see strength. Multifamily construction boomed in 2022, up an estimated 15 per cent from 2021. This year, however, NAHB projects that multifamily starts will fall 28 per cent and then likely stabilize in 2024. “Slowing rent growth, rising unemployment, tightening commercial real estate financing conditions, and a substantial amount of supply in the construction pipeline have caused a large backlog of multifamily developments,” says Danushka Nanayakkara-Skillington, assistant vice-president for forecasting and analysis at NAHB. U.S. residential remodeling activity was estimated to increase seven per cent on a nominal basis in 2022 following a growth rate of 13 per cent in 2021 as people continue to use their home for more purposes such as offices, schools, and gyms. However, with housing demand weakening, remodeling growth is expected to slow to five per cent gain this year and a four per cent increase in 2024.