In the aftermath of the Great Recession, your RIS Consumer Confidant recently learned that the U.S. home improvement industry is faring much better than the broader housing market, according to a new report from the Joint Center for Housing Studies of Harvard University.
Emerging Trends in the Remodeling Market is the latest report in the Improving America’s Housing series published by the Remodeling Futures Program at the Joint Center. While residential construction is many years away from a full recovery, the Center reports that America’s home improvement industry could post record-level spending in 2015.
A number of factors have contributed to the strengthening remodeling market: following the housing bust, many households that might have traded up to more desirable homes decided instead to improve their current homes; federal and state stimulus programs encouraged energy-efficient upgrades; and many rental property owners, responding to a surge in demand, reinvested in their properties to attract new tenants.
Improvement spending, however, has not been evenly distributed across the country. Homeowners in the nation’s top 50 remodeling markets accounted for a disproportionately large share – nearly 60 percent – of overall improvement spending.
Thanks primarily to their higher incomes and home values, owners in metro areas spent 50 percent more on improvement projects on average than their non-metro counterparts in 2013 according to the study.
Looking ahead, there are several opportunities for further growth in the remodeling industry. The retiring baby boom generation is already boosting demand for accessibility improvements that will enable owners to remain safely in their homes as they age.
Additionally, growing environmental awareness holds out promise that sustainable home improvements and energy-efficiency upgrades will continue to be among the fastest growing market segments.
Millennials, however, are the key to the remodeling outlook. “The millennials’ increasing presence in the rental market has already helped to lift improvement spending in that segment,” says Chris Herbert, managing director of the Joint Center.
For more information or to download the full report, click here.