Interesting fact: There are 137 million homes in the United States. 40% of them are 50 years or older in age. Wow! This is interesting and very important information for our industry as kitchen experts.
The April 2019 issue of The Qualified Remodeler magazine included an article stating that the home remodeling industry is continuing on an upward trend. The study was completed by the Harvard Joint Center for Housing Studies and shows why kitchen remodeling is the industry to be in! You can read the original article here. It includes very interesting data about what is contributing to the increase in remodeling spending. Is new construction slowing or growing in your community? Find us on Facebook at Kitchen Tune-Up Franchise System to join the conversation.
Remodeling Up 50% Since Great Recession
The home remodeling market expanded by more than 50 percent since the end of the Great Recession, according to “Improving America’s Housing 2019,” a new report by the Harvard Joint Center for Housing Studies.
The report 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 percent of the country’s 137 million homes are at least 50 years old,” says 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, contributing 2.2 percent to US economic activity in 2017.”
The 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. Households 55 and over account for half of all improvement spending by homeowners today.
The number of owners under 35 is finally showing signs of a rebound, and so is their remodeling spending. 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.
To pay for home improvements, homeowners relied largely on savings, even for major projects; more than half of projects costing $50,000 or more in 2017 were funded by cash. Expanding the ability of owners to pay for improvement projects over time—whether through home equity loans or lines of credit, cash-out refinances or contractor-arranged financing—would generate considerable growth in the remodeling industry.
“Over the next decade, the strong preference of older homeowners to age-in-place and the increasing difficulty of building affordable housing in many markets will continue to hinder the construction of new homes,” says Kermit Baker, director of the Remodeling Futures Program. “The remodeling industry will therefore retain its critical role in helping the country meet its housing needs.”
Qualified Remodeler is owned by SOLA Group Inc., which supports the Remodeling Futures Steering Committee, which produced this report.