In 2018, Americans spent approximately 7.5% more on home remodeling than they did in the previous year, according to a report by the Joint Center for Housing Studies of Harvard University via Reuters. All told, remodeling project sales for that year were valued at about $340 billion; Statista research figures the total US home improvement expenditure at closer to $394.
That’s 50% more than US homeowners spent after the 2010 recession, and undoubtedly one of the best years the remodeling industry has had for more than a decade.
So what’s driving this incredible growth?
Some say that property remodeling franchise owners have seniors to thank. After all, according to the Joint Center for Housing Studies of Harvard University report, “Improving America’s Housing 2019,” when it comes to remodeling spending power, seniors dominate the market. Between 1997 and 2017, seniors’ real aggregate spending exploded, rising 150 percent to $117 billion. In comparison, homeowners age 35 or younger yielded only a 9 percent spending increase, while those 35 to 54 accounted for another 12 percent.
With the “Silver Tsunami” rising, older adult spending is only going to increase, particularly as seniors demand more home remodeling to improve their accessibility, independence, and mobility while aging at home. By 2030, 1 in 5 Americans will be over the age of 65.
But seniors aren’t the only driving force behind the remodeling market boom. Consider this:
- Mother Nature keeps property remodeling franchises busy year-round. Reuters magazine posited that rebuilding efforts stemming from Hurricanes Harvey, Irma, and Maria, which ravaged Texas and other parts of the southern United States in 2017, likely contributed to remodeling/rebuilding industry sales spikes.Obviously, natural disasters aren’t anything to celebrate. But this bit of Reuters analysis does illuminate one of the main factors underlying the remodeling industry’s remarkable resilience: Mother Nature. Because even in those areas untouched by hurricane season, Mother Nature takes its toll on homes. Flooding, high winds, and even damage caused by the sun’s UV rays drives a significant amount of remodeling business It’s just a part of life.
- Millennials are buying fixer-uppers en masse. Only about 1 in 3 millennials under the age of 35 owned a home as of the end of 2018, according to the U.S. Census Bureau. That’s 8 to 9 percentage points lower than previous generations’ homeownership rates at ages 25 to 34, according to research from the Urban Institute’s Housing Finance Policy Center. But now millennials are starting to purchase “fixer uppers” and renovating them to their liking, rather than buying a more expensive home or custom-building something from scratch. Over the next decade, expect Millennial spending to soar.
- New technologies continue to drive remodeling interest and spending. The remodeling industry is enjoying a period of prolonged public attention across multiple different mediums.Evidencing its popularity among web-savvy members of the general public, remodeling remains a highly competitive web search phrase, with a quick query for “remodeling ideas” generating over 93-million hits in under a second. In an effort to capture some of that traffic and monetize it for their own benefit, web content creators are publishing new blogs and launching new websites catering to this audience every day, which effectively creates a positive feedback loop for remodeling interest. Remodeling-focused web queries and resources have never appeared in greater number, which means the remodeling industry has never had more attention.
Similar trends can be seen on reality TV. Indeed, there are now entire TV series, and even TV networks (e.g. HGTV), dedicated to home remodeling.
At the same time that technology increases awareness of the remodeling industry, it’s creating remodeling products that drive spending in all new ways. With more eco-friendly, cost-effective, and innovative materials and remodeling products to choose from than ever before, remodeling spending is up for both low income groups (who can now afford better remodeling features due to tech) and high-income groups (who want cutting-edge innovation in the home).
The Best Is Yet To Come For Property Remodeling Franchises
New research from Statista projects that total home improvement sales in 2022 will surpass $464.5bn USD. Moreover, researchers predict that the growth of the US home improvement and remodeling marketing market will exceed 5.5% in 2019.
The best is yet to come, so there’s still time to get in on the ground floor.
If you’re interested in learning what it takes to start a property remodeling franchise, contact a Kitchen Solvers representative by calling 888-484-8468. Whether or not you plan to work with our team, you’ll find plenty of free information you can use to make a smarter investment.Back