Home-Building and Remodeling Fuels Construction Growth

Covid-19 has had an impact on construction activity with the Associated General Contractors of America reporting that infrastructure projects may continue declining as state and local governments postpone or cancel projects as many face budget deficits. However, home building and remodeling has emerged stronger across the U.S compared to non-residential construction.

The Detroit News posted an article that showing that construction spending has increased 1.4% in August 2020 due to a surge in the building of single-family homes. On the contrary, non-residential construction, which includes hotels, office buildings, and shopping centers all fell 0.3%. However, a bright spot in non-residential construction is government construction highway projects that report spending up 1.9%. Outside of that, most of the growth seems to be on the building of single-family homes and home remodeling.

The National Association of Home Builders reports that total private residential construction spending in September 2020 was 9.9% higher than the previous year. In addition, the Joint Center for Housing Studies of Harvard University in October 2020 projected annual growth in renovation and repair spending of 4.1% in the first quarter of 2021 with gains slowing to 1.7 by the third quarter. This growth is attributed to the strengthening of home prices and sales activity.

Construction companies that diversify their portfolio of projects to include home building and remodeling may be best positioned to see growth in the coming year.

Correction: An earlier version of this article appeared on HispanicConstructionJobs.com on November 19, 2020 prior to the rebranding of the website to the current name, ConstructionTrabajos.com in 2025. All links and names to the previous website have been updated with the new website link and name.