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Study predicts slow and steady growth in the remodeling economy

A recently remodeled kitchen.

A recently remodeled kitchen. According to the Harvard University Joint Center for Housing Studies, this will be a strong year for the remodeling industry as older homeowners adapt their living spaces to meet their needs. File photo.

Researchers at Harvard University’s Joint Center for Housing Studies predict a strong 2017 for the remodeling industry.

The Joint Center says homeowner spending on remodeling will grow through 2025. In a biennial report called Demographic Change and the Remodeling Outlook, the researchers say older owners will account for most of the spending gains as they adapt their homes to meet their needs.

Baby boomers have led home improvement spending over the last 20 years, and older people will continue to have an oversize influence on the remodeling economy.

Homeowners age 55 and over are expected to increase their spending by nearly 33 percent by 2025 – which will account for three-quarters of the total gains in the decade, the report said.

Also, millennials, who have been widely reported to prefer downtown apartments over home ownership, are now poised to buy older, more affordable homes in need of repairs.

The residential remodeling market includes spending on improvements and repairs by both homeowners and rental property owners. The report says it reached an all-time high of $340 billion in 2015, surpassing the prior peak in 2007.

Spending by homeowners is expected to increase 2 percent per year through 2025, after adjusting for inflation. That’s about on par with the expected growth in the economy.

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