Remodeling work on the rebound, contractor hiring shows

300 dpi Fred Matamoros color illustration of home with price tags on roof, door, chimney, windows and siding for the cost of home improvements. The News Tribune (Tacoma, Wash.) 2007

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MATAMOROS MCT

Economist Russell Price decided to get a head start on work he'd been putting off for more than 10 years at his own house as he began to see an improvement in home-renovation data.

"I thought things would be picking up, so I started the process of remodeling what I thought was early," said Price, senior economist at Ameriprise Financial Inc. in Detroit.

In a "telling sign" he's not the only homeowner considering such projects, he said many of the contractors he contacted in April already were too busy to squeeze in additional work this year. That's because more Americans are renovating their homes, and many are choosing to hire outside help instead of doing the projects themselves.

This is shaping up to be a "strong year" for home-improvement spending, said Mike Englund, chief economist at Action Economics in Boulder, Colo. Seasonally adjusted annualized expenditures totaled $136 billion in June and have "bounced back" from a trough of almost $105 billion in November, Englund said, citing his own calculations using Census Bureau data.

Forty-three percent of U.S. homeowners surveyed last month by the website Remodelormove.com said they would renovate their residences this year, up from 41 percent in February and a five-year average of 33 percent. Among respondents, 74 percent plan to hire a general contractor for some or all of the work, compared with 73 percent in the previous survey.

The results show that activity is "broadening, but it's still more heavily skewed to people who were less impacted by the recession," said Dan Fritschen, the founder of the site, who has been tracking industry data since 2005. That's in part because consumers who hire contractors tend to be wealthier than their do-it-yourself peers, so as their home values improved, "they were able to pull the trigger more quickly on remodeling projects."

The median price of an existing house rose 13.5 percent, to $214,200, in June from a year earlier, the biggest year-over-year increase since 2005 and seventh consecutive month that property values advanced more than 10 percent, according to data from the National Association of Realtors.

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Remodeling work on the rebound, contractor hiring shows