Americans are spending more than ever to remodel their homes, and they’re expected to spend even more over the next decade.
Home improvement spending hit a record $220 billion in 2015, and is expected to grow to nearly $270 billion by 2025, according to a new report from the Harvard University’s Joint Center for Housing Studies.
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The report attributes the increased spending to demographic shifts, with Americans of all ages spending more on home improvement projects, although they’re spending for different reasons. Here’s why three different age groups are spending more:
Baby Boomers are spending the most. Older homeowners will make up an even greater share of remodeling spending as they invest in their homes with an eye toward universal design elements such as single-floor living and wider doors and hallways that will allow them to age in place. The report projects that spending by homeowners over age 55 will increase by a third over the next decade and account for nearly three-quarters of all gains.
Gen Xers are making up for lost time. Members of Gen X had a rough time during the housing downturn, and may just now have regained the financial security and home equity required for home improvement projects deferred over the past decade. On a per capita basis, homeowner between the ages of 35 and 54 spend the most on home improvement projects each year.
Millennials are buying fixer-uppers. As home affordability remains an issue for younger buyers, they’re being pushed to purchase older, outdated homes. But those millennials who are in a financial position to purchase a home may also be able to invest in improving it.