Americans are spending more on home improvement and are focusing on aesthetics and damage repair projects. The millennial generation is completing more home improvement projects in the U.S. Further details about these trends, surrounding home improvement in the U.S. can be found below.
Increased Spending on Home Improvement
- Consumers are spending more on home improvement in the U.S. because of improvements in their financial situation and this has been contributing to the growth within the remodeling market. According to IBIS World, the remodeling industry in the U.S. expanded between 2015 and 2020 with “an annualized 1.0% increase in private consumer spending on home improvements”.
- Overall, the remodeling industry is expected to see an annualized rate increase of 1.4% between 2015 and 2020 reaching $95.1 billion in 2020.
- Homeowners are spending more on home improvement because they have become more optimistic in their financial situation, have higher employment levels, and have more access to home equity funds.
- There is an increase in the number of homeowners who are seeking professional services to remodel their homes and they are spending more to do home improvements. They are also remodeling their homes to make them more eco-friendly.
- A HomeAdvisor survey found that the average spend on home services increases with the income of homeowners (i.e. the higher their income, the more they spend) and they can also save more than the average American.
- Homeowners with an income of $75,000 — $99,999 and lower spend less than $10,000 on home services on average, while those that earn between $100,000 and $200,000 spend between $10,000 and $15,000 on average. Homeowners who have an income of $200,000 and above spend over $20,000 on home services.
- In 2018, home improvement sales reached $394 billion in the U.S. and are expected to increase to $465 billion in 2022.
- The average home improvement spend per homeowner in the U.S. increased from $4,987 in 2014 to $7,560 in 2018.
- HomeAdvisor reported that the average home improvement spend per household increased by 17.15% in 2019, when compared with 2018, with an average of 2.2 home improvement projects being completed.
- The increase in per-household spend can be attributed to “increased rate of wage growth for consumers, the growing cost of skilled trade labor, the cultural focus on design aesthetics and quality of life, and newer and better home improvement tools.”
- The total spend on home improvements is influenced by the age of the home, years of ownership, age of owners, size, and the value of the home.
Aesthetics and Repairs
- In 2018, 60% of home improvement activities in the U.S. were decorating activities, but this decreased to 51% in 2019; renovating activities saw a decrease from 54% in 2018 to 47% in 2019, and repairing activities saw a decrease from 48% in 2018 to 35% in 2019.
- While the number of persons engaging in home improvement activities such as decorating, renovating, and repairing decreased between 2018 and 2019, HomeAdvisor listed room remodeling, new roofing, landscaping, buying/installing new appliances, painting the exterior, building a porch, and replacing or adding windows among the top home improvement projects.
- In fact, the HomeAdvisor report stated that room remodeling activities have been increasing from 2017 to 2019; with bathrooms topping the list of rooms that were remodeled.
- In 2019, 24% of millennials remodeled their bathroom and 17% remodeled their kitchen, 26% of Generation X remodeled their bathroom while 13% remodeled their kitchen, 20% of Baby Boomers remodeled their bathroom while 11% remodeled their kitchen, and 24% of the Silent Generation remodeled their bathroom while 7.4% remodeled their kitchen.
- The most popular reasons for homeowners’ decision to renovate their homes in 2018 according to iPropertyManagement were having the means to do it (57%), wanting to customize a recently purchased home (26%), repairing damages related to aging (16%), lifestyle changes (i.e. empty nest or new child) (16%), selling their home and wanting to increase its value (11%), and repairing damages caused by natural disasters (6%).
- HomeAdvisor’s survey found that Americans engaged in home improvement projects mainly to replace or repair damages, improve aesthetic or design, modernize their home, improve comfort, add value, increase happiness in their family, sell the home, other unstated reasons, increase personal finances, retirement, and marriage.
- The top motivator for remodeling rooms, painting exterior, landscaping, refinishing wood flooring, new flooring, and re-facing cabinets is for aesthetics.
- The top motivator for installing a roof, new appliances, new HVAC, building deck, replacing gutters, fencing, replacing windows, and new siding is because they are damaged; while building addition is for comfort.
- Beyond 2018, homeowners are looking to improve their homes by “prioritizing new appliances, roof replacements and hardwood refinishing in addition to room remodels.”
- In 2020, it is expected that there’ll be an increase in popularity for new exteriors, hardwood floor refinishing, “room remodels, installing new, appliances, and updating HVAC systems and roofs.”
Millennials Complete More Home Improvement Projects
- Homeowners are mostly motivated to spend on home improvement because they want to “[repair damages], defects and decays”. However, there are generational differences in motivation for home improvement.
- In 2015, millennial homeowners spent $59,800 to improve their homes, and this was increased to $60,400 in 2016.
- According to an August 2018 Residential Design report, 82% of Millennials homeowners, 70% of Generation X homeowners, 60% of Baby Boomer homeowners, and 39% of the Silent Generation homeowners planned to increase their home improvement spending in the following 12 months (i.e. by 2019).
- Overall, the millennial generation completes “the most home improvement projects”.
- Millennials who bought their homes in the past few years are focusing on increasing the value of their homes by doing aesthetic home improvement activities.
- Millennials engage in home improvement activities to increase the value of their homes, while Generation X and Baby Boomers just want to “modernize” their homes. Millennials and the Silent Generation have the preference to improve the aesthetics and design of their homes.
- Baby Boomers choose projects that they can become more involved in while Millennials opt for decorating projects.
- The 2018 iPropertyManagement report stated that 77% of millennial homeowners are spending more on “smart and security technology” compared with 25% of Baby Boomers.
- Since 2020, 81% of millennial homeowners have already engaged in at least one home improvement project.