A Look at US Home Improvement Trends

During my research of retailer Home Depot (NYSE:HD), I came across an extremely informative paper by the Joint Center for Housing Studies of Harvard University titled, “Emerging Trends in the Remodeling Market.” The paper was published in 2015 and the data goes up to 2013. It analyzes home improvement spending by consumer type, labor trends, geographical trends and demographic trends. I’ve included some of the paper’s most interesting findings. First, I had no idea that the total size of the remodeling market ranged from $214 billion to $324 billion in the U.S. from 2001 to 2013. See chart below. That means “on an inflation-adjusted basis, outlays per owner averaged $2,500 in 2013, well below the peak of $3,400 in 2007 but more than 8 percent above the $2,300 annual average posted between 1995 and 2005. Annual homeowner spending on improvements as a share of home value, [averaged] just over 1 percent in 2013, [and] has remained remarkably stable over the past decade.” If you break down remodeling expenditure between improvement and maintenance spending, about 65% of the total came from homeowner improvements, while maintenance accounted for 18% of the 2013 spending. Rental spending including improvements and maintenance came in about 18%. The chart below shows where homeowners spent their discretionary dollars.


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