At Home in Berks August 2017 - 18

FEATURES

Aging Homeowners Drive
Growth in Remodeling
as Millennials Begin to Gain Footing

by James E. Gavin

R

emodelers in the Home Builders Association are
encouraged by a recent report predicting growth
in the remodeling industry, particularly among
aging homeowners. A recent study released by Harvard
University is cautiously optimistic about foreseeable
growth.
Homeowner spending on remodeling is expected
to see healthy growth through 2025, according to
Demographic Change and the Remodeling Outlook,
the latest biennial report in the Improving America's
Housing series released by the Harvard Joint Center for
Housing Studies. Demographically based projections
suggest that older owners will account for the majority
of spending gains over the coming years as they adapt
their homes to changing accessibility needs. Millennials are poised to enter the remodeling market in greater
force, buying up older, more affordable homes in need
of renovations.

Spending by owners on improvements is expected
to increase 2.0 percent per year on average through
2025 after adjusting for inflation, just below the pace of
growth posted over the past two decades, and about on
par with expected growth in the broader economy. The
large baby boom generation has led home improvement spending for the past twenty years, and its influence shows no signs of waning. Older homeowners will
continue to dominate the remodeling market, as they
18

AT HOME IN BERKs August 2017

make investments to age in place safely and comfortably. Gen-Xers are
now in their prime remodeling years, and while some are still recovering from home equity losses after the housing crash, many in this
generation will undertake discretionary projects deferred during the
downturn.
As younger households move into homeownership, they will
supplement the already thriving improvement market. "With national
house prices rising sufficiently to help owners rebuild home equity lost
during the downturn, and with both household incomes and existing
home sales on the rise, we expect to see continued growth in the home
improvement market," says Kermit Baker, director of the Remodeling
Futures Program at the Joint Center for Housing Studies.
"Despite these challenges, the remodeling industry should see
numerous growth opportunities over the next decade," says Chris
Herbert, managing director of the Joint Center for Housing Studies.
"Strong demand for rental housing has opened up that segment to a
new wave of capital investment, and the shortage of affordable housing
in much of the country makes the stock of older homes an attractive
option for buyers willing to invest in upgrades."



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