U.S. Home Improvement Industry Outpaces Broader Housing Recovery

CAMBRIDGE, Mass. (Joint Center for Housing Studies) – 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 report released yesterday by the Joint Center for Housing Studies of Harvard University.

In fact, the report said the 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.

According to the report, "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-efficient 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 lift improvement spending in that segment,” said Chris Herbert, managing director of the Joint Center. “It’s only a matter of time before this generation becomes more active in the housing market, supporting stronger growth in home improvement spending for decades to come.”