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The home remodeling market in the US expanded by more than 50% since the end of the Great Recession, according to “Improving America’s Housing 2019,” a new report released March 12 by the Harvard Joint Center for Housing Studies. The study finds that, as homebuilding struggled to meet the nation’s growing housing needs, spending on improvements and repairs to both owner-occupied and rental properties hit a record of nearly $425 billion in 2017.
“With new construction slowly recovering from historic lows, 40% of the country’s 137 million homes are at least 50 years old,” said Abbe Will, associate project director in the Remodeling Futures Program. “The aging of the housing stock has been a boon to the remodeling industry, with spending surpassing investment in homebuilding every year for over a decade, and contributing 2.2% to US economic activity in 2017.”
The steady uptick in house prices in many markets and the aging population are also driving increased spending on improvements and repairs. Rising prices mean growing home equity, which provides owners both the incentive and the means to undertake more and larger projects. Additionally, older households have higher homeownership rates than younger households, and many have the resources to afford major renovations, including accessibility modifications that allow them to remain safely in their homes as they age. Households 55 and over account for half of all improvement spending by homeowners today.
Although younger households have struggled to gain a foothold in homeownership since the housing crash, the number of owners under 35 is finally showing signs of a rebound, and so is their remodeling spending. In particular, younger households contribute significantly more to local improvement spending in many metros across the Midwest and the South, where owning is more affordable than in high-cost metros on the coasts.