Harvard JCHS study shows record spending on US remodeling as new homebuilding slows.
Spending on remodeling hit a record of nearly $425 billion in 2017. This according to Improving America’s Housing 2019, a report produced every two years by the Remodeling Futures Program at Harvard’s Joint Center for Housing Studies, .
Difficult credit hampering growth
The record remodeling year occurred despite the homebuilding industry still struggling following the Great Recession. With credit more difficult to acquire, the industry is having trouble meeting the housing needs of the country. More than 50% of the remodeling expenditures were paid for using cash from savings. Even greater activity could be available if access to funds were more easily available through credit. Lack of credit is also hampering new home building.
An aging population and aging housing stock
According to Abbe Will, associate project director of the Remodeling Futures Program. With new construction slowly recovering from historic lows, 40% 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.”
Renovating for aging in place
House prices have escalated in many markets. High prices, combined with an aging population are driving increased spending on home improvements and repairs. Older households have higher homeownership rates than younger households. They also have the resources to afford major renovations. Households 55 and over account for half of all improvement spending by homeowners today.
Expanding the ability of owners to pay for improvement projects over time would generate considerable growth in the remodeling industry and help preserve and modernize the nation’s aging housing stock. Source: JCHS Improving America’s Housing 2019.
“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,” said 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.”