Americans and Home Investments
There’s nothing like working, learning, and living within the same four walls for more than a year to truly reveal the best and worst features of your home.
For us, it’s been the drafty first floor (it’s definitely time to add that gas fireplace) and the tiny home office (perfect for one teleworker, but way too cozy for two, especially when dueling conference calls are involved). The experience has pushed us to make some long-discussed investments in our 1955 house, and judging by the remodeling statistics released by the U.S. Census Bureau this spring, we are in good company. American homeowners are projected to spend an estimated $352 billion this year in home improvements and maintenance, according to the American Housing Survey. Some of those projects are small; the median outlay for home improvement projects during the past two years was just $1,364.
But big projects are happening too. Researchers from Harvard University’s Joint Center for Housing Studies (JCHS) found that homeowners spending $50,000 or more represented 39% of the remodeling market in 2019. In large metros such as Seattle, San Francisco, and Los Angeles, that figure is even higher, with big-ticket projects comprising more than half of the local remodeling market. Houston alone accounted for $8.2 billion in remodeling, according to JCHS.
Homeowners projected to spend $370 billion on remodeling
Anecdotal evidence suggests such trends will continue this year and next, as financially secure homeowners with strong home equity and extra disposable income after a year of limited opportunities for vacation and entertainment invest in long-desired home upgrades. In 2022, homeowners are projected to spend $370 billion on remodeling, according to JCHS estimates.
That’s great news for remodelers, who faced considerable economic uncertainty in early 2020. More than 80% of remodelers reported job delays and stoppages between March and July of 2020, according to The Farnsworth Group, due to homeowners’ financial fears and worries about having contractors in their homes.
Now, as summer approaches, remodelers find themselves not shrinking, but managing growth. Leads are up, with a growing backlog to juggle as homeowners beg to get on the schedule, even if the project won’t start for months. Positions that were cut last spring have been refilled, and there’s a hot market for carpenters, designers, and back-office employees who can support a growing company.
The downside? Delays for appliances and cabinetry are lengthening even more due to strong demand and covid-related limitations on factory production. Shortages of the computer chips used in many smart appliances are adding a new wrinkle. Many local permit offices are still not open for in-person service.
Still, compared to the uncertainty of spring 2020, the challenge of having too much business sounds like a problem remodelers are more than ready to tackle.
Alison Rice filled in for Director of Content Erika Taylor for the May/June issue.
