Based on the Improving America’s Housing 2025 report, the remodeling industry has thrived due to aging homes and households, as well as high property values. However, more investment is necessary to meet the increasing demand for energy efficiency and disaster resilience.
Data from the report shows that home improvement and repair spending surged from $404 billion in 2019 to $611 billion in 2022. It is projected to remain above $600 billion through 2025.
In 2023, roofing, windows, and HVAC accounted for 49% of improvement expenditures. The average homeowner spent nearly $4,700 on improvements that year.
According to JCHS, households led by individuals of color contributed 23% of improvement expenditures in 2023, up from 14% in 2003. Immigrant homeowners also play a growing role in the market, accounting for 13% of expenditures in 2023, up from 8% in 2003.
In 2023, homeowners aged 65 and above contributed 27% of total improvement outlays, a significant increase from 14% in 2003.
Over the past two decades, the number of homeowners aged 65 and above rose by 12 million, elevating their share of all homeowners from 24% to 34%. During the same period, their average annual spending per owner increased from $1,800 in 2003 to $3,800 in 2023, more than double the growth in per capita spending among all homeowners.
The aging housing stock in the US, with a median age of 44 years in 2023, signifies the need for reinvestment. Homes constructed before 1980 saw higher improvement spending compared to newer homes, and maintenance spending was also significantly higher. Many low-income homeowners reside in properties with structural deficiencies or lacking basic amenities like water, electricity, or heating.
Sophia Wedeen, a senior research analyst at JCHS, emphasized the importance of expanding improvement and repair services for these homeowners through financing tools and counseling programs to maintain affordable housing and ensure safe living conditions.
Modern-day concerns
The rise in climate-related disasters such as hurricanes, wildfires, and flooding has led to increased spending on disaster-driven repairs, reaching $49 billion in 2022 and 2023. Consequently, homeowners’ insurance premiums rose by 17% between 2021 and 2023.
In 2023, homeowners allocated $139 billion towards improvements to enhance home energy efficiency, a significant increase from 2003.
Carlos Martín, director of the remodeling futures program at JCHS, highlighted the opportunity presented by energy-related improvements to reduce greenhouse gas emissions, enhance housing efficiency, and lower utility costs.
Labor shortages pose a challenge to the repair and remodeling industry, with a significant portion of contractors being self-employed. The industry faces obstacles due to proposed tariffs and plans to deport undocumented immigrants, leading to high material costs and labor shortages.
Despite recent spending peaks, Chris Herbert, managing director of JCHS, emphasized the need for additional investment to improve energy efficiency, disaster resilience, and accessibility for the nation’s 145 million homes, predicting continued growth in the residential remodeling sector.