Dive Brief:
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The more generations living in a household, the more likely that household is to remodel, according to a National Association of Home Builders analysis of Census Bureau data. Two- and three-generation households were more likely to remodel over the course of a year (32% each) compared to one-generation households (28%).
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Although less likely to remodel, two-generation households with a generation older than the household head spent more than other groups when they did so at a two-year average of $12,561. Meanwhile, one-generation households spent $10,010, on average, for remodeling work.
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Of owner-occupied homes, 58% are one-generation households; 38% have a head of household of one generation and members of a younger generation (usually a family with children); 3.2% are made up of three or more generations; and 1.1% have a head of household and one older generation.
Dive Insight:
Remodeling and renovation projects are ramping up as more homeowners look to update their existing properties to either boost their sales values or make them suitable to their needs for longer. Eight in 10 owners plan to complete such work in the next year, according to HomeAdvisor. That activity is reflected in the NAHB’s Remodeling Market Index, which increased five points from Q4 2016 to Q1 2017.
The Harvard Joint Center for Housing Studies estimates remodeling activity to grow at a rate of 2% annually through 2025, driven largely by millennials looking to customize their homes as well as add smart technology. First-time buyers, including millennials, are spending more on such work, with the figure increasing 22% from 2015 to 2016, according to Houzz. Baby boomers who choose to age in place will also account for a large share of the remodeling market as they seek to update their homes for accessibility.
Aging-in-place, especially, stands to drive remodeling growth. The 55-plus segment is projected to take a 56% share of all residential remodeling spending by 2025, up from 31% in 2005. Already, 80% of remodeling firms reported such work in Q4 2016, up 12 percentage points from 2013, the NAHB reported.