Spending on home improvement projects is higher than ever and is expected to get even stronger.
According to Demographic Change and the Remodeling Outlook, the latest biennial report in the Harvard Joint Center’s Improving America’s Housing series, homeowners and rental property owners spent $340 billion on residential remodeling in 2015, surpassing the previous record set in 2007. Spending is set to increase 2 percent each year on average through 2025, as well.
Growth is primarily driven by Baby Boomers who are upgrading their homes so that they can age in place.
Expenditures by homeowners age 55 and over are expected to grow by nearly 33 percent by 2025, accounting for more than three-quarters of total gains over the decade. The share of market spending by homeowners age 55 and over is projected to reach 56 percent by 2025, up from only 31 percent in 2005.
The report also found that Gen-Xers are entering their “prime remodeling years” and will finally embark on home improvement projects that they’ve put off since the recession. Also, while they are having difficulties in buying homes, young adults will have their own remodeling projects in the near future. Millennials are familiar with changing technology and will be the leaders in improvement projects that feature home automation.
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