Residential improvements spending experienced a robust growth in 2013-2018. It increased to $216.7 billion, hitting the new record high in April 2018, from around $116.0 billion in July 2013.

The aging of housing stock, one of the consequences of modestly improving but still relatively low new construction during the past decade, has contributed to the growth of residential improvements.

Half of owner-occupied homes were built before 1980, which require some replacements and/or additions of new amenities.

The aging of homeowners was another factor, as the share of remodelers undertaking projects to accommodate aging-in-place increased significantly between 2013 and 2017.

The National Association of Home Builders (NAHB) Remodelers reported that half of remodelers are currently experiencing shortages of labor – carpenters by over 60 percent, bricklayers & masons by 71 percent, concrete workers by 70 percent, and drywall installers by 65 percent.

While older households contribute heavily to home improvement spending, in recent years the home ownership and remodeling spending rates for individuals 35 years old or younger has increased.

A Harvard University Joint Center for Housing Studies (JCHS) report found that 7 million rental and vacant units were converted into owner occupancy in 2016 and 2017, with new owners in these units contributing $50 billion in improvement spending.

Roughly 75 percent of renovations were making improvements or alterations and 42 percent were for repairs or maintenance.

Nearly half (46 percent) of renovating households reported that the cost of their renovation project was budgeted. On the other hand, more than a third (38 percent) of households went over budget.

The average bathroom remodel costs $10,500. They also have the highest return on investment- about 102 percent; The average kitchen remodel costs nearly $4,400 and can bring a return of about 90 percent.

Only 77 percent of those who hired a contractor used a written agreement. This was doen from 80 percent in 2006.

WI Guest Author

This correspondent is a guest contributor to The Washington Informer.

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