US Remodeling Market Continues to Grow as Homes Age

According to Improving America’s Housing 2025, a new report released on Wednesday by the Harvard Joint Center for Housing Studies (JCHS), the extraordinary strength of the US remodeling market has been supported by the aging of homes and households, as well as record-high property values. Still, far more investment is needed to address growing needs for energy efficiency and disaster resilience of the country’s 145 million homes.

The report points out that the remodeling market soared above $600 billion in the wake of the pandemic and, despite recent softening, remains 50% above pre-pandemic levels. However, industry fragmentation, inflation, and a shortage of skilled trade labor jeopardize the ability of the industry to fully meet demand.

JCHS listed five takeaways from the report:

1. Takeaway 1: Pandemic Fuels Unprecedented Spending on Remodeling. Home improvement and repair spending vaulted from $404 billion in 2019 to $611 billion in 2022 and is expected to remain above $600 billion through 2025.
2. Takeaway 2: Climate Change Necessitates Improvement Spending and Drives Up Insurance Premiums. The growing frequency and intensity of hazard events like hurricanes, wildfires, and flooding have increased spending for disaster repairs to $49 billion in 2022–23, an astonishing leap from $16 billion in 2002–03.
3. Takeaway 3: The Housing Stock is Older than Ever and Substandard Conditions Must Be Addressed. With a median age of 44 years in 2023, the housing stock is older than ever, and critical improvements are needed to replace aging components.
4. Takeaway 4: Changing Demographics Affect Remodeling Spending. The shifting characteristics of US households continue to reshape activity and spending patterns in the remodeling market.
5. Takeaway 5: Fragmentation, Surging Costs, and Labor Shortages Hinder Remodelers. Despite a flurry of mergers and acquisitions, the remodeling industry remains highly fragmented with large shares of self-employed contractors and small payroll companies. The industry is also hampered by high costs of building materials, including uncertainty around the potential impacts of tariffs, and labor shortages.

Adding background and analysis, Chris Herbet, Managing Director of the Center, said:

“Given the strong foundation and growing needs, residential remodeling is expected to remain a formidable economic sector in the years ahead. And despite unparalleled spending in the last few years, far more investment is needed to improve energy efficiency, disaster resilience, and accessibility for the nation’s 145 million homes.”