The market for home improvement and repair is now well over $400 billion annually says Study Center of Harvard University
The US market for home improvement and repair is now well over $400 billion annually as the housing stock faces pressure to meet the nation’s growing and changing housing needs. Years of rising costs of new construction mean a growing number of vacant and rental units are now filling demand for homeownership, and these converted units often require substantial investments in renovation and repair. This and other key trends in the remodeling industry are highlighted in the 20th anniversary „Improving America’s Housing report“ by the Joint Center for Housing Studies of Harvard University (JCHS).
With new construction slowly recovering from historic lows, 40 percent of the country’s 137 million homes are at least 50 years old. 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 percent ($425 billion) 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 home 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 the homeownership market 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 east and west coasts.
With homeownership recovering, almost 7 million rental and vacant units were converted to owner occupancy in 2016 and 2017, and their owners invested $50 billion in improving their condition. Additionally, homeowner spending on repairs following natural disasters totaled about $30 billion, accounting for 6 percent of national home improvement expenditures in 2016–2017.
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(21.03.2019, USA: 03.21.2019)