The home remodeling market increased to $567 billion in 2022, an estimated 15 percent increase from 2021, according to an annual housing report published Thursday by the Harvard Joint Center for Housing Studies.
Researchers attributed a surge in the home remodeling market in recent years in part to the Covid-19 pandemic, which led to an increased number of people working from home, precipitating a surge in spending on home improvement projects. As more people returned to work in 2022, the home remodeling market continued to see an increase in spending, but researchers expect home improvement and repair to slow in 2023.
Alongside the release of the 2023 report, the center hosted a webinar Thursday featuring a presentation from Abbe H. Will — a senior research associate at the Joint Center for Housing Studies — followed by a panel discussion.
Thursday’s talk centered on trends related to home improvement projects and disaster reconstruction over the last two decades. Jane Dzielski, the principal analytical lead at Google, moderated the discussion with four panelists.
Between 2007 and 2021, the percentage of homeowner improvement budgets dedicated to exterior replacements increased by over 3 percent, while the percentage of systems and equipment replacements increased by more than 5 percent. In contrast, the percentage of room additions fell from 18.2 percent to 6.7 percent, more than an 11-percent drop.
The report also found that though lower-income homeowners spent less on repairing and improving their homes, these expenditures made up a larger proportion of their incomes. The homeowners in the lowest income quintile spent around $2,500 annually on average per owner, which represented 20.1 percent of their annual income. By contrast, those in the highest income quintile spent more than $9,000 annually on average per owner, which represented 6.4 percent of their annual income.
“Most of our lower-income homeowners and occupants are living in houses with such a greater energy burden that their resources are dwindling,” said Ruth Ann Norton, the president and CEO of Green & Healthy Homes Initiative.
In addition to lower-income homeowners, Norton said elderly people were also bearing the brunt of the burden of poor infrastructure.
The report also indicated that homeowners continued to spend a significant portion of their home improvement budgets on energy-related projects. Spending on such projects remained at less than 30 percent of total home improvement budgets but increased by 7 percent between 2009 and 2011 and has never dipped below 33 percent since.
At the end of Thursday’s webinar, panelists shared their optimism for America’s housing market.
Jessica A. Granderson ’97, the interim division director of the Building Technology & Urban Systems Division of the Lawrence Berkeley National Laboratory, said she was “much more naturally inclined to optimism,” adding that increasing homeownership among households of color are “foundational to wealth creation.”
Keith Rozolis, the president and CEO of ABC Supply, said he was “bullish” on the housing market due to the demographics of current and future homeowners.
According to Norton, the biggest opportunities in the future include changing “the moral compass on the condition of low-income housing in America.” To bolster the housing labor market, she also argued for the increased recruitment of people from low-income backgrounds into trade schools in the field.
Carlos Martín, the project director of the Remodeling Futures Program at the Joint Center for Housing Studies, agreed, arguing for the improvement of housing safety.
“I’d like to think that this pandemic gave us a chance to rethink both how our homes work for us and what we need to get, what kind of performance we actually want out of our housing,” Martín said.