CAMBRIDGE, MA — Spending in the U.S. residential remodeling market reached unprecedented heights in the wake of the COVID-19 pandemic, soaring above $600 billion for the first time in 2022. And despite modest declines the past two years, market expenditures for improvements and repairs to owner-occupied and rental properties is expected to remain “far above” pre-pandemic levels in 2025.
Those are among the key conclusions ofImproving America’s Housing, a comprehensive annual report released by the Joint Center for Housing Studies of Harvard University.
The Cambridge, MA-based Joint Center noted that the “extraordinary strength” of the market has been supported by aging homes and households, as well as by record-high property values and a healthy job market. The pandemic also sparked a spending boom in improvements, as well as in routine maintenance and repairs.
Since peaking at $611 billion in 2022, the remodeling market has contracted slightly in the face of mixed economic and industrial conditions. Yet spending is ultimately expected to remain near its peak through 2025, posting about $608 billion this year, according to the Joint Center (see related graph, above).
“Many owners continue to adapt their properties for changing needs and uses, even as today’s lower rates of personal savings and household mobility dampen improvement and repair spending,” the Joint Center’s report stated. “Nonetheless, industry fragmentation, inflation and a shortage of skilled trade labor jeopardize the ability of the industry to meet demand.
“Overcoming these obstacles will be critical for modernizing and preserving the existing housing stock, including addressing adequacy and accessibility needs,” the report added.