Study Confirms Home Remodeling Market is Bouncing Back
A new study confirms the growth we’re seeing in the Chicago home remodeling market will be steady.
In the aftermath of the Great Recession, the U.S. home improvement industry has fared much better than the broader housing market, according to a new report from the Joint Center for Housing Studies (JCHS) of Harvard University.
Called “Emerging Trends in the Remodeling Market,” the JCHS study reports that while residential construction is many years away from a full recovery, the home improvement industry could post record-level spending in 2015.
Home Remodeling Market Report Highlights
According to the report . . .
By 2013, the remodeling industry was back near $300 billion and could easily post record-level spending in 2015.
With the economy strengthening and house prices recovering, spending on discretionary home improvements— kitchen and bath remodeling, room additions and outside attachments such as porches and decks—rose by almost $6 billion between 2011 and 2013.
Even more significantly, the share of spending on discretionary projects increased for the first time since 2005. This category includes larger home remodels and additions that improve homeowner lifestyles but can be deferred when economic conditions are uncertain.
In 2013, discretionary spending on kitchen and bath upgrades contributed 17 percent of the $192 billion in total homeowner spending, while expenditures for additions and major structural alterations to other rooms made up another 13 percent.
Home Remodeling Spending by Baby Boomers and Gen-Xers
In 2013, owners in their mid-30s to mid-50s spent about 30 percent more than average on improvement projects than the rest of the population.
The share of home improvement spending by homeowners age 65 and over has increased dramatically in recent years, rising from 13 percent in 2005 to 23 percent in 2013.
Baby Boomers accounted for almost half of all home improvement spending while gen-Xers contributed over a third to total purchases.
For more information about home remodeling marketing trends, visit www.jchs.harvard.edu.