industry statistics home improveme nt · $10,000 and $25,000 on their home improvement and...

3/7/2020 Home Improvement Industry Statistics, Trends & Analysis [2020]

https://ipropertymanagement.com/research/home-improvement-industry-statistics 1/18

iPropertyManagement Data & Research Home Improvement Industry Statistics

Home ImprovementIndustry Statistics

The U.S. home improvement industry is stronger than it has been in

over ten years and encompasses the sale of building materials,

appliances, décor, and other home enhancements, and the services

offered by contractors, tradespeople, and other workers who help to

build, install, modify, and upgrade homes. The business of

homeownership represents a significant portion of the U.S. economy.

$394Btotal home improvement sales in the U.S. in 2018

$680Bforecast revenue for DIY home improvement market in 2025

5.5%growth of U.S. home improvement industry in 2019

68%consumers who visit home improvement store websites

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With a nationwide shortage of housing and record-high home prices, more

homeowners prefer to stay in their properties versus move or upgrade to new

ones. The deficit doesn’t just affect owner-occupied properties. Rental housing

is also increasingly scarce. It’s no wonder that nearly half of American

homeowners are living in the first home they purchased. Of those who have

lived there for longer than six years, 61% will choose to renovate instead of

move. These homeowners are staying in their homes and spending considerable

resources on remodeling, renovations, and redecorating. Whether it’s on

discretionary or necessary projects, consumers spent 17% more in 2018 on their

homes than in 2017.



As the bulk of existing residential properties in the United States ages, new

construction struggles to keep up with increasing demand. In this housing

market, the business of the upkeep, maintenance, and improvement of existing

properties flourishes. Home improvement spending still outpaces home

maintenance spending.



Home improvement can encompass a project as simple as repainting a room or

as complex as gutting an interior. Homeowners are increasingly choosing the

do-it-yourself or DIY option, and big-box stores such as Home Depot make it

easier than ever. Both Lowes and Home Depot offer workshops and classes.

They stock vast selections of materials that would have been found mainly in

contractor supply houses even a decade ago. Tool and equipment rental

stretches the budget and increases accessibility to homeowners who would

never be able to afford a project otherwise.

Many regions in the U.S. are experiencing favorable economic conditions that

tend to coincide with remodeling activity, such as strong growth in both

employment and home value. As home prices continue to rise, more

homeowners are choosing to invest in home improvements and renovations.

According to the Joint Center for Housing Studies, there is a proven connection

between changes in median home values and home improvement spending.

Homeowner equity assures homeowners that they can indeed afford the

projects they could not afford during the great recession.

The bulk of projects Americans are undertaking are small scale (under $5,000),

but big projects such as renovating kitchens and baths are growing in

popularity. Most homeowners spent between $5,000 and $10,000 improving

their homes in 2018, with those in more densely populated and metropolitan

areas spending closer to $18,000. Home improvement and renovations in the

U.S. totaled over $350 billion. $194 billion of that figure represents the 13 million

projects started in 2018 that cost the homeowner over $1,000. Those with higher

incomes and multiple properties tend to remodel more and undertake home

improvement projects more frequently. 25% of homeowners spent between

$10,000 and $25,000 on their home improvement and renovating projects in

2018.

Why Renovate?



American homeowners place a high value on making their homes more beautiful

and functional. Self-expression and individuality are increasingly reflected in our

physical environments, and cookie-cutter homes are very much out of style.

There are even websites such as mcmansionhell.com dedicated to how

mediocre and awful the home trends over the last few decades was.

Homeowners in the U.S. indicate that improving the design and functionality of

their homes is typically the most significant consideration when planning a

remodeling project. In the age of Pinterest and a surging number of millennial

homeowners who share their lives on social media, the appearance of one’s

surroundings and home becomes increasingly important. Those who own rental

properties have to keep up to attract and keep good tenants. For example, a

prospective renter is more likely to be attracted to a property with a neutral

grey or greige painted rooms than a rental with white walls.

The biggest reason most homeowners chose to undertake new projects is

changed circumstances that make it possible. With their homes reaching record

values and the corresponding increase in home equity, they finally have the

means to get new flooring or that fancy kitchen and bathroom. Many

homeowners indicated that the projects they were spending on in 2018 had

been deferred during the recession. The improvements they chose to do have

been planned for a while.

Next is the desire to customize a recently purchased property, or to upgrade a

home that’s aging or has been damaged. And many more want to upgrade a

home before selling it to maximize the home’s value. With the exception of

property owners and buyers looking for investment properties, a beautifully

redecorated and renovated “plug and play” home will have far more buyers or

renters making offers on it than a project home. Properties that outwardly

indicate the need for more money to be spent to bring it into the 21st century



are not always as attractive. Viewing old listing photos of a property that was

sold, renovated, and “flipped” back on the market for a higher price are a great

way to see this principle in action.

Nearly half of the homes in the U.S. were built before 1980, and 38% before 1970.

The median age of homes in the U.S. is rising, and as homes age, the need for

upgrades, improvements, and renovation will only continue to grow. New

construction has slowed, and with most homeowners living in homes that were

built before 1979, fixing up and improving the appearance of an aging home is a

more affordable option. 28% of property owners indicate that renovating is a

more affordable option than buying a property that would be more aligned with

their needs.



The longer a homeowner remains in their home, the more likely they are to want

to renovate than relocate.

Many home improvements not only enhance the homeownership experience

and make a residence more appealing and comfortable, but they can also save

money. The builders of older homes did not always place the same values on

efficiency as we do today or have the kinds of materials and technology

available. Upgrading and renovating the house can yield long term savings on

both the utility and insurance bills and keep the home safer.

The Most Popular Home ImprovementProjects & ProductsAmericans are improving the appearance and comfort of their homes, starting

with the kitchen and bathrooms first. While these are higher-ticket projects, the

potential for return on the investment made is high, especially if the property

will be sold or rented.

With 71% of homeowners undertaking improvement or renovation projects

including interior or exterior paint, this is by far the most commonly purchased

home improvement product. The paint section in most home improvement

stores can take up as much as a fifth of the store.



Most Wanted Projects: Kitchen andBathKitchens and baths continue to be the most popular projects, even though they

are the most pricey and involved. Many homeowners regard their kitchens as a

central gathering place in the home. Healthy food, cooking, and nutrition are

increasingly valuable to younger generations of homeowners and having a

beautiful, functional kitchen to cook in is part of a coveted lifestyle.

Kitchens and bathrooms can also be the most unsightly areas in a house as they

age because they are the most difficult to transform and update. It’s easy to go

through a home and change paint colors, remove tired brass doorknobs and



replace with more trendy brushed nickel or oiled bronze hardware, and hang

new curtains. Even new carpet and flooring projects can often be completed in

less than a week.

Replacing grimy tile, discolored and crumbling grout, avocado green

countertops and cracking 1970s oak cabinetry can be a little more involved.

Malfunctions in the plumbing systems in these areas of the home can cause far

more damage to a home than an ugly doorknob. Hence, not all homeowners’

desire to upgrade kitchens and baths is aesthetically driven.

Kitchen projects are costing more, with the average spend in 2018 on both large

and small projects increasing by 27% from last year. The cost of upgrading

bathrooms also grew as much as 17% in the last year. This is partly caused by

increasing tariffs on products such as tile, plumbing, and other building

materials. Only 35% of homeowners were choosing to enlarge their kitchen vs.

41% last year in 2018. More luxurious finishes and features are becoming

increasingly popular, and this is where many homeowners are choosing to

spend.



The percentage of our population who are aging comprise over 50% of the

homeowners who are renovating and remodeling their homes. This

demographic is often overlooked, but they spend the most money. Accessibility

is becoming increasingly important to them, and they regularly will invest in

home improvements and upgrades in their bathrooms like walk-in tubs and

smart toilets. This is a growing market as more seniors want to age “in place”

and remain in their homes as long as possible.

Smart Home Improvement



Security and “smart” enhancements for the home represent a growing share of

the market, with spending increasing as much as 20% each year since 2016.

Nearly half of the renovation projects undertaken by homeowners will also

include smart technology.

Home automation is nothing new, but technology has become highly

sophisticated. Smart systems and devices are made to automate or remotely

control home systems and functions such as thermostats, lighting, security

systems, and even vacuum cleaners. These are managed through an app on a

phone, on a computer, or another interface.

For those who own properties such as Airbnb and short term rentals, utilization

of smart technology to facilitate access, check-in/check-out and other functions

can save money, time, and enhance the experience of the renter. Upgrading a

home’s security systems can also save money on homeowners’ insurance.



For property owners who have long-term tenants, the use of certain smart

technology may be considered a potential violation of privacy. However, there

are many options to keep property safer and still give tenants privacy. New

technology can send instant notifications of gas leaks, temperature fluctuations,

smoke, and even water leaks. This technology can help a property owner act

quickly to mitigate the amount of damage done.

Home security continues to be the most popular upgrade, with an increase of

18% of homeowners opting for it in 2018 vs. 15% in 2017, and 12% in 2016. The

most popular smart home upgrades for security are alarm/detection systems,

motion-activated lighting, garage door openers, cameras, and video

intercom/doorbell systems. Outdoor security is also increasingly popular.

Smart technology for entertainment systems is nearly as important, followed by

climate control. Smart thermostats help increase a home’s comfort and energy

efficiency and continue to be one of the most common smart devices installed

in newly renovated homes.

Millennial property owners tend to spend more on smart technology and place a

higher value on the high-efficiency and performance of their home’s systems.

77% of millennials invest in smart and security technology vs. 25% of baby

boomer homeowners.

While one might think the smart home is the domain of the millennial, many

individuals are turning to smart technology to help aging members of their

families. This growing demographic of baby boomers who are homeowners are

making plans to live in their homes longer. Smart technology can help make

their lives easier and keep them safe. Smart thermostats help seniors regulate

both the temperature and the utility bills. Security systems and electronic door

locks can keep things safe and allow family members to monitor the home.



Home Improvement, Home Maintenance, &Emergency Spending

One in three homeowners had to complete an emergency improvement in 2018,

with an average cost of $1206.00.

Many homeowners in regions where hurricanes or other natural disasters have

hit intend to repair or reinforce their homes. Some insurance companies offer

incentives and discounts to homeowners who add certain upgrades to their

homes. For example, an owner of a property in a coastal area in Florida may

receive a discount on their homeowners’ insurance policy if they install storm

shutters. Property owners in hail-prone states may see a discount by putting a

new and stronger roof on their home.

And more commonly occurring than natural disasters are malfunctioning

plumbing or other systems within the home or property that can cause damage.

Aging plumbing and electrical systems can keep a homeowner awake at night.

But newer is not always better. Statistics show owners of more modern homes

tend to spend more on emergency repairs. It’s interesting to note that

homeowners may spend as much as $3.70 less per year since a house was built

on emergency home projects.

However, older homes do come with their share of problems. One of the most

common issues necessitating an upgrade in an older home is electrical systems

not being grounded or able to handle the load that a modern household’s

appliances can place on it. If a homeowner purchased a home with service lower

than 100 amps or charming antique knob-and-tube wiring, they might find a

hard time finding an insurance carrier who will insure the property.

DIY vs. Professional HomeImprovement



Over a third of home improvement projects are commonly considered DIY, such

as interior painting. However, projects like exterior improvements (replacing

windows, siding, roofing, etc.) are rarely attempted by the average homeowner.

These are pretty specialized projects with the potential for a lot to go wrong.

As much as Home Depot reassures homeowners that “you can do it and we can

help,” more than four out of five homeowners hire professional and licensed

specialists to assist with projects. 51% of homeowners hired licensed tradesmen

such as plumbers or electricians, 36% hired a construction manager, and 20%

chose to hire a designer or architect.



Americans love to watch home improvement television shows, but most do not

have the time or consider themselves knowledgeable enough to undertake

certain projects themselves.

Many projects done improperly by homeowners can result in more problems

down the road. Remodeled homes are notorious for code violations, especially if

the homeowner or an unqualified contractor did the work. Whether it’s a failed

inspection when a home is being sold, or a buyer purchasing a property that is

fraught with problems caused by shoddy “Johnny Homeowner” work,

homeowners are becoming increasingly wary of the pitfalls of trying to do it

yourself.

The good news is that there are many websites dedicated to helping match up

property owners with reputable home improvement professionals. It’s easier

than ever to do the work you need yourself and hire professional help for the big

projects.

ConclusionThe home improvement industry shows no signs of slowing down.

Homeownership will always mean maintenance and as the years pass,

renovating and upgrading. Home remodeling, decorating, and landscaping is a

popular American pastime. Baby boomers undertake bigger, more involved

projects and millennials tend to focus more on the decorating side. Home

improvement retailers are happy to accommodate both. Regardless of the

condition of our economy, the age of most of the housing stock in the United

States and the nature of the housing market will ensure the parking lots are

always full every weekend at Home Depot, Lowes, Menards, and other home

improvement stores.

Sources



1. Half of US Homes Built before 1980

(http://eyeonhousing.org/2018/08/half-of-us-homes-built-before-1980/)

2. Study Finds Links in Local Up-Down Cycles for Home Values and

Remodeling Expenditures

(https://www.remodeling.hw.net/benchmarks/economic-outlook-rri/study-

finds-links-in-local-up-down-cycles-for-home-values-and-remodeling-

expenditures_o)

3. Work Is Speeding Up Nationwide, RRI Finds | Remodeling

(https://www.remodeling.hw.net/benchmarks/economic-outlook-

rri/remodeling-work-is-speeding-up-nationwide-rri-finds_o)

4. 5 Home Improvements That Can Save You Money on Homeowners

Insurance (https://www.consumerreports.org/homeowners-

insurance/home-improvements-that-can-save-you-money-on-

homeowners-insurance/)

5. HOUZZ & HOME

(https://st.hzcdn.com/static/econ/2019USHouzzAndHome.pdf)

6. Total sales of home improvement in the US 2008-2023

(https://www.statista.com/statistics/239753/total-sales-of-home-

improvement-retailers-in-the-us/)

7. True Cost of Home Ownership (https://www.homeadvisor.com/r/true-cost-

report/#ixzz5u6WgESE8)

8. Ace Hardware Reports Fourth Quarter and Full Year 2018 Results

(https://newsroom.acehardware.com/ace-hardware-reports-fourth-

quarter-and-full-year-2018-results/)

9. https://www.statista.com/topics/2430/smart-homes/

(https://www.statista.com/topics/2430/smart-homes/)

10. Home Improvement – Statistics & Facts

(https://www.statista.com/topics/1732/home-improvement/)

http://eyeonhousing.org/2018/08/half-of-us-homes-built-before-1980/

https://www.remodeling.hw.net/benchmarks/economic-outlook-rri/study-finds-links-in-local-up-down-cycles-for-home-values-and-remodeling-expenditures_o

https://www.remodeling.hw.net/benchmarks/economic-outlook-rri/remodeling-work-is-speeding-up-nationwide-rri-finds_o

https://www.consumerreports.org/homeowners-insurance/home-improvements-that-can-save-you-money-on-homeowners-insurance/

https://st.hzcdn.com/static/econ/2019USHouzzAndHome.pdf

https://www.statista.com/statistics/239753/total-sales-of-home-improvement-retailers-in-the-us/

https://www.homeadvisor.com/r/true-cost-report/#ixzz5u6WgESE8

https://newsroom.acehardware.com/ace-hardware-reports-fourth-quarter-and-full-year-2018-results/

https://www.statista.com/topics/2430/smart-homes/

https://www.statista.com/topics/1732/home-improvement/



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