Harvard on Home Improvements

Four big takeaways every remodeler needs to know

March 22, 2019
outdoor living spaces are becoming increasingly popular in remodeling

Remodeler Larry Rych, president of Imperial Kitchens and Baths, has embraced the outdoor living trend, remodeling the backyard of his own Chicago home. In this image, to avoid visual clutter, Rych selected L-shaped cedar benches to pull double duty as comfortable seating and hidden storage space.

Every two years, the Joint Center for Housing Studies at Harvard University, one of the premiere reporting institutions on the remodeling industry, releases its assessment of the market. The report delves into everything from what kinds of properties are being remodeled, to who’s paying for them. 

Here are some of the major takeaways from the recently released report, “Improving America’s Housing 2019,” which includes data up to 2017. 

Outdoor Living Is Lucrative

Kitchen and bathroom remodels have long been a favorite of homeowners, so it comes as little surprise that, since 2013, spending for both remodeling types has increased 37% and 42%, respectively. More surprising is the 53% increase on spending for “lot or yard” improvements over the same period, which includes essentials, like septic tanks, but also recreational structures, reflecting the increasingly popular trend of outdoor living spaces. Spending on room additions is down 32%. 

The Young Start Buying, Finally

It’s been said time and again over the years that even though millennials aren’t buying homes, they still want to be homeowners. Well, now they both want homes and are buying them. For the first time in a decade, the under-35 homeownership saw an uptick, moving 6% to 7.3 million from 2015 to 2017. That’s still well below 2007’s rate of about 10 million. However, average improvement spending among young homeowners is $2,900, nearly matching its peak in 2007. 

Replacement Projects Are Hot

Nowadays, “moving up” in housing might as well refer to “doing a remodel,” as rising home prices and stagnant wages are making home purchases less and less appealing. We see this reflected in rising replacement project spending. Thirty percent of total improvement spending from 2015-2017 came from upgrades to roofing, siding, windows, doors, HVAC systems, and insulation. Exterior replacement projects now account for a larger share of spending (19.6%) than they did in 2007 (17.2%) just before the housing crash. 

Replacements include exterior, systems and equipment, and interior projects. Discretionary projects include kitchen and bath remodels, room additions, and outdoor projects. Home improvement spending, referring specifically to improvements made on owner-occupied homes, was $233 billion in 2017, up $13 billion from just before the housing crash in 2007.

Rental Properties Are Getting Remodeled, and Becoming Owner-Occupied

People are finally starting to remodel rental properties in force. Improvement spending on rental properties hit $93 billion in 2017, higher than any other year in the 2000s.

About the Author


About the Author


James McClister is managing editor for Professional Remodeler.

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