Rising house prices and incomes, an aging housing stock, and a pickup in household growth are all contributing to today’s strong home improvement market. Demand is robust in coastal metros with especially high house values and household incomes. Demographic trends should continue to buoy the market over the next decade, with the rising tide of older homeowners accounting for more than threequarters of projected growth. Although the huge millennial generation is set to shape future spending trends, younger households have been slow to break into homeownership and the remodeling market.
Spending on improvements, maintenance, and repairs— including outlays by both homeowners and rental property owners—reached a record high in nominal terms of $340 billion in 2015, according to the latest estimates from the Joint Center for Housing Studies. This is an increase of 12 percent from the 2013 level and 7 percent from the recent market peak before adjusting for inflation. Market spending continued to climb in 2016, up an estimated 6 percent to $361 billion. With national house prices back to pre-recession levels and both household incomes and existing home sales on the rise, further growth is anticipated for 2017.
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