Sharp Rise Seen in Spending for Remodeling

A record $110.3 billion will be spent on remodeling this year in the United States, up 9.1% from the estimated $101.9 billion spent in 1987, according to a forecast by Kermit Baker of Cahners Publishing Co.

The Newton, Mass.-based economist said that the surge in remodeling has been helped by relatively high mortgage interest rates and the increase of two-income families.

Many homeowners would rather remodel or expand their homes than take on the increased monthly payments that accompany another house, he said. Two-income couples typically will hire contractors to handle remodeling projects because they have the money to do the job but not the time, he added.

Los Angeles/Long Beach was the top remodeling marketing in both 1986 and 1987, showing a 22.9% increase from 1986 to last year. Boston was in second place, with a 48.3% increase from 1986 to 1987, according to the Cahners study.

Overall, the Northeast is the center of growth for remodeling, with 20% of the nation’s homes but with 30% of remodeling spending. The region’s strong economy and “neglected housing stock” are the reasons for the region’s remodeling surge, Baker said.