15 metros where home improvement spending is rising the fastest
Published 3:30 pm Friday, February 10, 2023
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15 metros where home improvement spending is rising the fastest
Many signs show that 2022 has been a strong year for home remodeling—if homeowners can find contractors to do the work, according to a recent survey of home remodelers by the National Association of Home Builders.
Angi examined the annual Metro Area Home Improvement Projection from Harvard University’s Joint Center for Housing Studies to see which parts of the United States were estimated to see the most remodeling growth over 2022. The report was initially published in February 2022 and has been updated several times, the most recent of which is reflected in this analysis.
Home improvement spending for the year is projected to increase by 13.8% compared to 2021 across the 48 metro areas tracked by Harvard.
Analysis was limited to owner-occupied homes in those 48 major metropolitan areas. Metros include the central city as well as its surrounding towns and suburbs. Projected growth was determined using factors including remodeling permits, single-family home prices, and sales of building materials and garden supplies.
As home prices increased and homeowners locked in low mortgage interest rates over the past two years, households had more cash available to make improvements to a space increasingly doubling as the office.
Remodeling growth was largely forecast for the West and Sunbelt regions due to rapid home price appreciation and rising incomes in these areas.
“Interest rates are having a negative effect, more so on new construction than remodeling, so it’s not surprising that remodeler sentiment has so far managed to stay positive,” National Association of Home Builders Chief Economist Robert Dietz told the magazine of the Mortgage Professionals of America in October 2022.
Dietz’s organization expects a “small increase” in remodeling activity in 2023, while the Joint Center for Housing Studies at Harvard anticipates a “sharp downturn” by the middle of next year.
#15. New Orleans
– Projected 1-year home improvement spending growth (Q4 2022): 14.8%
While remodeling activity increased around the country since 2021, Louisianans have had more reasons than most to invest in and work on their homes.
Residents of the Bayou State are still rebuilding a year after weathering Hurricane Ida, a Category 4 storm that compounded COVID-19 supply chain shocks and contributed to the bankruptcy of 11 insurance companies.
– Projected 1-year home improvement spending growth (Q4 2022): 14.9%
Remodeling companies in Pennsylvania have reported seeing an uptick in remodeling interest. “‘People aren’t working from home, they’re living from work now,” locally-based Power Home Remodeling told the Philadelphia Business Journal, attributing increased remodeling activity to remote work trends.
Philadelphia also tied with Milwaukee as one of the best cities to find fixer-upper homes in today’s high-interest-rate environment, according to an August study from StorageCafe.
#13. Kansas City, Missouri
– Projected 1-year home improvement spending growth (Q4 2022): 15.0%
The Kansas City metro area recently had its moment in the spotlight as Magnolia Network’s “Bargain Mansions” completed its fourth season of streaming on Discovery Plus. The show pivoted its premise this season due to the difficult housing market. It worked with existing homeowners in the area to remodel the homes they live in and intend to keep rather than remodeling homes that are on the market.
#12. Oklahoma City
– Projected 1-year home improvement spending growth (Q4 2022): 16.3%
The Oklahoma City housing market has been cooling since the summer, though median home values still remain 7.6% above where they sat one year ago, according to Redfin. In 2023, the metro area is expected to see home prices rise 2.6%, more slowly than in previous years.
Meanwhile, Tulsa is claiming victory for having one of the most successful remote work incentive programs in the country, which has brought thousands of remote workers to the state.
#11. Salt Lake City
– Projected 1-year home improvement spending growth (Q4 2022): 16.5%
Salt Lake City experienced an influx of residents from larger cities in 2021. The hot housing market pushed median home values in the metro area up 9.2% year over year by October 2022, according to Redfin data.
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#10. San Diego
– Projected 1-year home improvement spending growth (Q4 2022): 16.6%
The housing market in San Diego is now experiencing a rapid downturn in home values after median home prices in the market appreciated 5.6% year over year in October.
So many permits to renovate homes have been requested that the city’s Development Services Department told San Diego CBS affiliate KFMB-TV that there is quite a backlog, and a permit can take months to receive.
– Projected 1-year home improvement spending growth (Q4 2022): 16.8%
The median home sale price in Atlanta grew 10% year over year in October 2022, according to Redfin, and home prices are forecasted to grow another 4.7% in 2023.
Corporate expansion in the Atlanta area has led to worker relocations over the last two years, fueling demand for homes in the market while supply remained low. Companies bringing workers to the area include Cisco, Carvana, and tech companies such as Microsoft, Apple, and Alphabet.
#8. Virginia Beach, Virginia
– Projected 1-year home improvement spending growth (Q4 2022): 17.2%
The median selling price for a home in Virginia Beach has grown 5.1% year over year in October, according to Redfin. And Realtor.com’s economists are forecasting it to grow at that same rate in 2023 as housing inventory remains tight. The region gets more interest from prospective buyers in the wealthy Washington D.C. area than anywhere else in the country.
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#7. Sacramento, California
– Projected 1-year home improvement spending growth (Q4 2022): 17.3%
Remodeling is big business in Sacramento. So much so that some local design experts recently scored a new HGTV series set in the city called “Mash-Up Our Home.”
Home price gains peaked at 16.7% year over year in April, according to Redfin data. Many gains made earlier this year were erased by a recent downturn in home values.
#6. Las Vegas
– Projected 1-year home improvement spending growth (Q4 2022): 17.5%
The median home price in Las Vegas rose rapidly from 2020 to 2022. The metro area was one of several targeted aggressively by tech companies flipping homes for a profit—also known as iBuyers—according to MIT.
Homeowners have seen the value of their houses increase 6.8% in the year ending in October, according to Redfin. Prices are forecast to grow more slowly in 2023, notching a 2.3% price gain, according to Realtor.com estimates.
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#5. San Antonio
– Projected 1-year home improvement spending growth (Q4 2022): 19.1%
The median home price in San Antonio is up 4.1% year over year in October. Like other Texas metros, homeowners in the region have benefitted from an influx of residents seeking more affordable living. The city sees the most interest from prospective buyers in Austin and Los Angeles, according to Redfin.
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#4. Austin, Texas
– Projected 1-year home improvement spending growth (Q4 2022): 19.2%
In Austin, corporate relocations have led to an exploding population and rapidly rising home values. The city was an early hub for tech employers Google and Apple. Tesla and Samsung were among the companies that announced corporate relocation and expansion plans for the Central Texas region, totaling more than 26,000 jobs in 2021 alone.
Median home prices in the area have tumbled since May, when they charted 15.6% year-over-year gains, according to Redfin.
– Projected 1-year home improvement spending growth (Q4 2022): 20.3%
Like Austin, Phoenix was a pandemic boomtown that saw home prices rise rapidly from 2020 to 2022. Central Texas and Central Arizona were popular destinations for people who wanted to work remotely and were fleeing the cramped coastal cities of New York City and Los Angeles in search of more space at affordable rates.
Home inventory remains tight, though, and home values have yet to plummet. The median home price in Phoenix remains 5.5% above values seen a year ago in October, according to Redfin.
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#2. Riverside, California
– Projected 1-year home improvement spending growth (Q4 2022): 21.9%
Like Austin and other hot pandemic markets, Riverside home values have been pushed upward by the metro’s employment growth—a trend that spans back a decade at least. Riverside experienced the third-most employment growth of any large metro area, according to home builder data analysis firm Zonda.
Home price gains peaked in May, with the median home price nearly 20% more than the year prior, according to Redfin.
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#1. Tucson, Arizona
– Projected 1-year home improvement spending growth (Q4 2022): 23.0%
Home improvement spending in Tucson is expected to surpass all other metropolitan areas in 2022. Home price gains here peaked in June when the median home price grew 19% from the same time period the year prior, according to Redfin.
Realtor.com forecasts home values will grow another 4.5% next year in Tucson. iBuyers, now pulling back their investment strategies nationwide, also drove home values up in Tuscon with their frenzied transactions from 2020 to 2022.
This story originally appeared on Angi and was produced and
distributed in partnership with Stacker Studio.