Americans are spending more on home remodeling than ever before. From 2010 to 2017, spending on residential improvements and maintenance jumped over 50%, reaching a new high of $424 billion. And the upward trend is expected to continue. According to the National Association of Home Builders (NAHB), remodeling spending for owner-occupied single-family homes is expected to increase 1.6% in 2019 and another 1.1% in 2020.
What’s driving the renovations?
Despite the fact that we’d all love to have an HGTV dream home, today’s home makeovers are less about wants and more about needs.
The nation’s housing supply is growing older. Nearly 40% of America’s homes have been around for at least 50 years, and new construction is not keeping pace to replace the older homes on the market. Consequently, owners have turned to remodeling to bring their homes up to modern standards.
Which projects are people prioritizing?
As the chart below illustrates, spending on discretionary improvements (kitchen and bath remodels, room additions, attachments) and essential replacements (roofing, siding, insulation, HVAC, appliances, etc.) was pretty evenly split in 2007. A decade later, discretionary improvements only made up 31.8% of expenditures, while replacements represented nearly half of home remodeling costs.
While replacement projects are less appealing than, say, a kitchen or bath remodel, they do provide a higher return on investment. (For example, a new roof reaps a 109% cost recovery.) That means homeowners can enjoy the dual benefits of extending their homes’ lifespans while making their money back when it comes time to sell.
Do you need financing for home improvements? Talk to your lender about how you can leverage your home equity to make your home improvement needs a reality.
 National Association of Realtors®, 2018 Profile of Home Buyers and Sellers.
 Redfin, Home Prices, Sales & Inventory, January 2018-December 2018.
 Realtor.com® 2019 National Housing Forecast.