Residential remodeling is a significant and expanding sector of the housing market, as a result of the limited housing inventory and high mortgage rates, which motivate numerous householders to enhance their current residences rather than relocate.
Additionally, the persistent housing inadequacy issue and the elderly housing stock continue to fuel the increasing demand for home improvements.
Around $670 billion was spent by homeowners on home remodeling initiatives in 2024. During the year, remodeling expenditures were reported by approximately 20 million households, which accounts for 23% of all owner-occupied households.
This analysis investigates the variations in remodeling expenditures across household characteristics, such as household type, householder age, generational cohort, and household income, using data from the Consumer Expenditure Survey (CES).
In this analysis, remodeling expenditures encompass three primary categories of home improvement projects: replacements, alterations, and additions.
Household Types
In 2024, married-couple households were responsible for the majority of remodeling activity, as evidenced by the highest quantity of spending and the number of households reporting projects.
Married couple households accounted for approximately 60% of all households that reported a remodeling endeavor, which translates to 12 million households spending a combined $458 billion.
In particular, married couple households with children account for more than one-third (37.3%) of the total share of remodeling expenditures.
In comparison to other married couples, married couples with children aged 6-17 spend the most on remodeling their households annually, with an average expenditure of $43,330.
These households are frequently in their prime earning years and may enhance their residences to accommodate their expanding families by implementing projects such as kitchen and bathroom renovations, finished basements, or the addition of additional restrooms.
This is apparent in the fact that this group allocates the most funds to addition projects compared to any other household type, with an average expenditure of $159,187.
Additionally, married couples without children account for a substantial portion of the total remodeling expenditure, which amounts to 36.6%.
Remodeling initiatives were undertaken by nearly 5.9 million married couple households, which spent approximately $208 billion on improvements in 2024.
Conversely, single-parent households spent less per remodeling household and accounted for less than 2% of total remodeling expenditure.
The average expenditure of male single-parents was $25,904, which was marginally higher than that of female single-parents, who spent $19,542.
With an average annual expenditure of $24,286 per remodeling household, single-consumer households accounted for a significantly higher proportion of total remodeling expenditures, at 14%.
Nevertheless, the lowest remodeling participation rate among all household categories was only 19% in 2024, as reported remodeling expenditures.
Only 6% of the total expenditures were attributed to other husband-wife households, which are likely to have more complex household arrangements and include multigenerational households.
Nevertheless, the average annual expenditure for households that reported remodeling initiatives was $43,347, the highest among all household types.
The demand for additional living space to accommodate extended family members may rise as a result of the more intricate living arrangements and larger household size in these households.
This led to an average expenditure of $131,173 on addition initiatives by these households in 2024.
Age Group
The cost of remodeling varies significantly among different age groups and typically follows a life-cycle pattern with two significant peaks: homeowners aged 35-44 and 55-64.
The most significant remodeling expenditures were reported by these two categories. In 2024, households aged 35-44 spent an average of $42,400 on remodeling projects, while households aged 55-64 spent an average of approximately $40,300.
As the median age of first-time property buyers is 38 years old, the initial peak is in line with the formation of a family.
The second peak among householders aged 55-64 may be indicative of pre-retirement remodeling, such as long-term home modernization or aging-in-place preparations.
The participation rates among homeowners aged 45-54 and 55-64 were also relatively high, at approximately 24%.
In contrast, householders aged 85 and older reported the lowest participation rate, at 18%, and the lowest remodeling expenditures overall.
Age Group
It is also beneficial to examine the extent to which remodeling activities differ among different generational cohorts.
Baby Boomers accounted for the largest proportion of total remodeling expenditures among generational groups, spending approximately $254 billion in 2024, which is approximately 38% of all remodeling expenditures.
This is indicative of the Baby Boomer homeowner household size and their relatively higher remodeling participation rate (24%), as well as the increased home equity they have accrued over time. This may increase their financial capacity to undertake home improvement projects.
In 2024, Gen X households spent over $207 billion on remodeling initiatives, closely following the Baby Boomer group.
The sustained investment in long-term home upgrades and improvements is supported by the fact that many Gen X homeowners are at their peak earning years and have higher homeownership rates.
Millennials reported the greatest average spending of approximately $36,300 among all homeowners who remodel their homes in 2024, followed by Gen X ($33,700).
It was likely bolstered by the increasing number of homeowners and the purchase of a first-time property.
Millennials also spent a comparatively higher amount on additions, with an average expenditure of over $160,000. These patterns are primarily indicative of the requirements of remote work and/or expanding families.
In contrast, the Silent Generation and Gen Z households reported lower remodeling participation rates and lesser expenditures overall, which is indicative of the earlier and later stages of the homeownership life cycle.
In 2024, only 21% of Gen Z homeowners and 18% of Silent Generation homeowners engaged in remodeling endeavors.
Consequently, their respective percentages of the remodeling market remained relatively low, at approximately 1.8% and 5.1%, respectively.
Household Income
The cost of remodeling increases significantly in proportion to the income of the household. Homeowners who earned $200,000 or more accounted for approximately 40% of the total remodeling expenditure.
Households with higher incomes were more inclined to remodel and expended a significant amount of money during the process.
In 2024, nearly 29% of households with an income of $200,000 or more undertook home improvement initiatives, while only 18% of households earning less than $50,000 did so.
In 2024, households earning $200,000 or more spent an average of nearly $61,000 on remodeling projects. This amount was more than three times the average expenditure of households earning less than $50,000.
The variance in remodeling activity across household composition, age, generation, and income is underscored by these findings.
Married-couple households, middle-aged homeowners, and higher-income households continue to be the primary contributors to remodeling demand.
This is due to the fact that homeowners are upgrading and enhancing their existing homes to accommodate their evolving family and lifestyle requirements.
Average Remodeling Expenditure for All Homeowner Households
Additionally, it is crucial to evaluate the average remodeling expenditures of all householder households, rather than solely those that have reported remodeling projects.
By assessing the expenditures of all householder households, it is possible to obtain a more comprehensive understanding of the market’s overall economic impact, which includes both the prevalence and intensity of remodeling activity.
The dashboard below illustrates the disparity in average spending among various household characteristics, including income, household type, age, and generation, by including households with no remodeling expenditure.
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