According to a new report from Harvard’s Joint Center for Housing Studies, America’s remodeling market soared above $600 billion in the wake of the pandemic and remains 50% above pre-pandemic levels. However, they say industry fragmentation, inflation, and a shortage of skilled trade labor jeopardize the ability of the industry to meet demand and overcoming these obstacles will be critical.
“The home remodeling market is now on the other side of a phenomenal boom in activity and spending driven by the COVID-19 pandemic and its immense impacts on the economy, housing markets, and the ways owners use their homes. Despite small declines in 2023 and 2024, market spending for improvements and repairs is seemingly entering a new normal of elevated levels supported by the continued aging of homes and households, as well as high levels of housing wealth.”
Some key takeaways from their report:
- Pandemic Fuels Unprecedented Spending on Remodeling; Home improvement and repair spending vaulted from $404 billion in 2019 to $611 billion in 2022, and is expected to remain above $600 billion through 2025.
- The Housing Stock is Older than Ever and Substandard Conditions Must Be Addressed; With a median age of 44 years in 2023, the housing stock is older than ever, and critical improvements are needed to replace aging components.
- Fragmentation, Surging Costs, and Labor Shortages Hinder Remodelers; Despite a flurry of mergers and acquisitions, the remodeling industry remains highly fragmented with large shares of self-employed contractors and small payroll companies.
Click here to read the full report at Harvard’s Joint Center for Housing Studies.
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Written by: Brad Beckett