JCHS Report: Home improvement spending on the rise
As much of the U.S. economy took a hit during the pandemic conditions of 2020, the nation’s home improvement moved ahead.
According to a new report from the Harvard Joint Center for Housing Studies (JCHS), home improvement spending increased 3% to $420 billion last year. In contrast, the economy diminished by 3.5% during the same span.
Despite remodeling projects performed by pros coming to a halt, primarily due to lockdown conditions and fears over COVID-19, DIY renovations took off. The JCHS said the rise in DIY spending was fueled by the sudden increase in working from home along with a surge in demand for larger homes and yards in lower-cost, less dense areas.
The strength of the home remodeling market made 2020 the 10th consecutive year of expansion for the industry, but the pandemic disrupted several long-term trends, the JCHS illustrates in its new Improving America’s Housing 2021 report.
“From 2010 to 2019, homeowners largely relied on professional contractors, and remodeling activity was heavily concentrated in coastal metros,” said Kermit Baker, director of the Remodeling Futures Program at the JCHS. “But in 2020, amid concerns about having contractors in the home, DIY projects gained new popularity, and remodeling activity shifted to lower-cost metros where larger shares of younger households—traditionally the most active do-it-yourselfers—could afford to own homes.”
In late March of last year, 60% of respondents to a homeowner survey cited by the JCHS had begun at least one DIY maintenance or improvement project in the previous two to three weeks. But by early May, the share had jumped to nearly 80%.
Also, during the pandemic, many urban renters purchased homes—a transition that often begins a new cycle of improvement projects—in outlying communities in search of safer living conditions, more space, and lower housing costs.
But for homeowners with low incomes, keeping up with mortgage payments—let alone home maintenance—was a challenge in 2020. While 68% of the lowest-income owners spent less than $500 on improvements and repairs in 2019, as a group, they are an important segment of the remodeling market and contributing around 10% of national spending each year, the JCHS said.
“Lower-income owners were more likely to have lost employment income due to the pandemic,” said Abbe Will, associate project director of the Remodeling Futures Program at the Center. “If their finances do not improve enough to cover back mortgage payments and deferred maintenance, the already-large disparity in housing conditions between lowest- and highest-income homeowners will only grow.”
Although many segments of the population have yet to recover from last year’s recession caused by the pandemic, growth in home remodeling is expected.
“In the short term, many homeowners who deferred projects—both large and small—in 2020 are expected to complete those renovations once the pandemic is over,” said Baker. “Additionally, there has been an upturn in homeownership as younger households look to purchase homes, the number of multigenerational households has been growing, and remote work has given people more locational flexibility and the desire to modify their homes.”