Millennials are key to the home remodeling market

According to a study conducted by the Harvard University Joint Center for Housing Studies and released in 2015, the home improvement industry managed better than the housing industry in the past few years. From 2011 until 2013, there was an increase of almost $6 billion worth of spending on improvement. It was the first increase since 2007.

Homeowners under the age of 35 spent almost twice as much for DIY improvements among all the owners in 2013. Younger homeowners also tend to spend equal parts of their budgets on discretionary projects and on replacements. In contrast, older owners spend more on replacement projects like plumbing and less on discretionary projects such as bath upgrades, regardless of the economic conditions.

Millennials are less likely than older generations to be married, have their own households or have children by age 28. This is a predicament for the home remodeling market because married homeowners spend more on improvements than singles. Having children also augments spending.

Location-wise, metro area homeowners spend approximately 50 percent more on remodeling than those in nonmetro areas. Metro areas located along the coasts had higher spending, due to higher property values and household incomes.

It is expected that home improvement spending would continue to improve, especially in the higher income parts in the West, such as Sacramento and Las Vegas. Rental demand and rent are also expected to grow and could be mitigated in new construction in metro areas resulting in excess supply.