How Much Do Americans Spend on Home Improvement?

Introduction

Home improvement is a popular and profitable industry in the United States, as millions of homeowners invest in upgrading, maintaining, and repairing their homes every year. But how much do Americans actually spend on home improvement? And how has this spending changed over time? To answer these questions, we can look at some data from the census and other sources.

Census Data on Home Improvement Spending

The census does not directly collect information on home improvement spending, but it does provide some indicators that can help us estimate the level and trend of this spending. For example, the census reports the number and percentage of owner-occupied housing units that made additions, alterations, or improvements in the past two years, as well as the median value of these improvements. According to the 2020 census, there were about 54.2 million owner-occupied housing units that made some home improvements in the past two years, accounting for 39.6% of the total owner-occupied housing stock. The median value of these improvements was $5,000, up from $4,000 in 2010.

Another indicator that the census provides is the median value of owner-occupied housing units, which reflects the market value of the homes. The median value of owner-occupied housing units in 2020 was $217,500, up from $194,500 in 2010. This implies that the cost of home improvements may have increased as well, making it more attractive for homeowners to invest in their homes.

Other Sources of Home Improvement Spending Data

The census data, however, may not capture the full extent and diversity of home improvement spending, as they only include major projects that require permits or add value to the homes. To get a more comprehensive and detailed picture of home improvement spending, we can also look at some other sources of data, such as surveys, market reports, and industry statistics.

One of the most reliable and comprehensive sources of data on home improvement spending is the American Housing Survey (AHS), which is sponsored by the Department of Housing and Urban Development (HUD) and conducted by the U.S. Census Bureau. The AHS collects detailed information on the characteristics and conditions of housing units in the United States, including home improvements, repairs, maintenance, and emergencies. The AHS is conducted biennially, and the latest data available are from 2021.

According to the 2021 AHS, about 65% of owner-occupied housing units made some home improvements in the past two years, spending an average of $9,240 per unit. The most common types of home improvements were interior painting, flooring, and plumbing. The most common sources of funding were personal savings, credit cards, and home equity loans.

Another source of data on home improvement spending is the Leading Indicator of Remodeling Activity (LIRA), which is produced by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes, based on a statistical model that uses various economic indicators as inputs. The LIRA is released quarterly, and the latest data available are from the third quarter of 2023.

According to the LIRA, annual spending for improvements and repairs to owner-occupied homes is expected to decrease at a moderate rate over the coming year, from $433 billion in the third quarter of 2023 to $412 billion in the third quarter of 2024. This reflects a slowdown in the growth of home improvement spending, which peaked at $465 billion in the fourth quarter of 2020, amid the pandemic-induced surge in demand for home remodeling.

Other sources of data on home improvement spending include surveys, market reports, and industry statistics from various organizations, such as Angi, Statista, Zippia, and others. These sources provide different perspectives and insights on the trends, drivers, and challenges of home improvement spending, as well as the preferences, behaviors, and satisfaction of homeowners and service providers. Some examples of these sources are:

• According to a survey by Statista, the most common types of home improvement projects done during the pandemic in the U.S. in 2020 were interior painting (38%), flooring (35%), and plumbing (31%).
• The global home improvement market value was estimated at 800 billion U.S. dollars in 2020, and is projected to reach 1.1 trillion U.S. dollars by 2027.
• The leading home improvement chains in the U.S. in 2020 were The Home Depot, Lowe’s, and Menard, with sales of 110.2 billion, 89.6 billion, and 10.9 billion U.S. dollars, respectively.
• According to a survey by Angi, homeowners who did projects spent an average of $15,680 this year on home improvement, maintenance and emergency repairs, across an average of 14.4 projects.
• According to a survey by Zippia, 8% of American homeowners planned to spend over $10,000 on home improvement projects in 2021, and 14% of American homeowners are expected to spend between $5,000 and $10,000 on home improvement projects in 2021.

Conclusion

The data from various sources show that home improvement spending is a large and dynamic industry in the United States, with millions of homeowners investing in their homes every year. The level and trend of home improvement spending depend on various factors, such as the condition and value of the housing stock, the availability and cost of financing, the economic and social environment, and the preferences and needs of homeowners. Home improvement spending can have positive impacts on the quality, comfort, and value of the homes, as well as the economy, the environment, and the society. However, home improvement spending can also face challenges, such as labor shortages, material price fluctuations, regulatory barriers, and consumer dissatisfaction. Therefore, it is important to monitor and analyze the data on home improvement spending, and to understand the opportunities and risks that it entails.

References

• U.S. Census Bureau. (2020). 2020 Census: Housing Characteristics. Retrieved from https://www.census.gov/programs-surveys/decennial-census/2020-census/data/housing-characteristics.html
• U.S. Census Bureau. (2020). 2020 Census: Housing Tables. Retrieved from https://www.census.gov/programs-surveys/decennial-census/2020-census/data/tables.html
• U.S. Census Bureau. (2021). American Housing Survey. Retrieved from https://www.census.gov/programs-surveys/ahs.html
• U.S. Census Bureau. (2021). American Housing Survey: Home Improvements. Retrieved from https://www.census.gov/programs-surveys/ahs/data/interactive/ahstablecreator.html?s_areas=00000&s_year=2021&s_tablename=TABLE1&s_bygroup1=1&s_bygroup2=1&s_filtergroup1=1&s_filtergroup2=1
• Joint Center for Housing Studies of Harvard University. (2023). Leading Indicator of Remodeling Activity. Retrieved from https://www.jchs.harvard.edu/leading-indicator-remodeling-activity
• Statista. (2020). Most common types of home improvement projects done during the pandemic in the U.S. in 2020. Retrieved from https://www.statista.com/statistics/1127987/home-improvement-projects-during-pandemic-usa/
• Statista. (2020). Global home improvement market size from 2018 to 2027. Retrieved from https://www.statista.com/statistics/1133149/global-home-improvement-market-size/
• Statista. (2020). Leading home improvement store chains in the United States in 2020, by sales. Retrieved from https://www.statista.com/statistics/239496/leading-home-improvement-store-chains-in-the-united-states-by-sales/
• Angi. (2021). Angi Home Services Report. Retrieved from https://www.angi.com/home-services-report/
• Zippia. (2021). Home Improvement Statistics 2021. Retrieved from https://www.zippia.com/advice/home-improvement-statistics/