Remodeling Industry Soars to New Heights Despite Industry Challenges

(3/20/25)  According to a report released today by the Harvard Joint Center for Housing Studies, the U.S. remodeling market soared above $600 billion in the wake of the pandemic and, despite recent softening, remains 50% above pre-pandemic levels.

Takeaways from the report, called “Improving America’s Housing 2025,” include:

·      Home-improvement and repair spending skyrocketed at the beginning of the pandemic, when everyone was spending more time at home. Spending increased from $404 billion in 2019 to $611 billion in 2022, and is forecast to remain above $600 billion through 2025.

·      Climate change is driving home-improvement spending. The increasing frequency and intensity of natural disasters, such as hurricanes, wildfires and floods, drove spending for disaster repairs to $49 billion in 2022-2023 – a huge increase from $16 billion in 2002-2003. In 2023, homeowners also spent $139 billion on improvements to improve energy efficiency, nearly four times the amount spend in 2003.

·      The nation’s housing stock is older than ever. The median age of the housing stock in the U.S., as of 2023, was 44 years, an age where critical improvements are needed to replace and update aging building components. That’s driving improvement spending for older homes.

·      Changing demographics is affecting remodeling spending. Homeowners over 65 are paying an increasing share of total home-improvement expenses. And, as the nation’s population becomes more diverse, households headed by a person of color are contributing more to the home-improvement market as well.

·      The home-improvement industry faces challenges. Despite the industry growth, the home-improvement industry is being challenged by the soaring cost of building materials and by a shortage of skilled trade workers.