One decade after the financial recession, new home construction has become sluggish – meaning that American homes are getting older, and as a result, homeowners are funneling more money into remodeling.
A new report published by Harvard University's Joint Center for Housing Studies found that in 2017, Americans spent a whopping $ 425 billion on home improvements, a record high;
Baby boomers are largely to thank for upswing in home renovations; 70s and 80s, so they can stay in their homes instead of relocating.
"Homeowners age 55 and over have dominated the home-remodeling market for nearly a decade, overtaking middle-aged owners as the primary source of home improvement spending," the report said.
Aggregate spending among older homeowners has grown more than 1
A majority of homeowners – 77 percent – They said they were using cash from savings. About 5 percent said they are relied on to charge or to store charge cards.
Still, there's a correlation between rising home prices and home improvement spending, the report found. Because homes are more expensive, fewer people are changing residences. The national mobility rate has fallen by almost half over the past four decades.
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In areas like Boston, Dallas, San Francisco, Seattle, and San Jose, owners have spent more and more than they have been in cities that have not fully recovered from the recession, such as Miami, Las Vegas or Phoenix.