Apgar added that homes topping $400,000 accounted for only 11% of the housing stock in 2003 — or 8 million units — but were responsible for 30% of home improvement expenditures. Owners of these homes fueled over 90% of the growth in improvement spending between 1995 and 2003, he said, with owners in this group increasing their remodeling expenditures from $8 billion to more than $40 billion.
Owners of the high-end homes, Apgar said, completed more than 800,000 room additions in 2002-2003, which accounted for 43% of total spending in this category. The group also accounted for one-third of total spending on kitchen and bath remodels.
Of the more than $40 billion spent on improvements in high-value homes in 2003, $34.1 billion of the work was done by professional contractors, according to the Harvard report, leaving only 15% in the hands of do-it-yourselfers. By comparison, among owners with homes valued at less than $100,000, one-third of improvements were do-it-yourself jobs.
Even so, affluent households still contributed to do-it-yourself activity, the report said, with a D-I-Y component found in 28% of all projects completed by owners with $120,000+ incomes. “Overall, the nation’s 10 million highest-income home owners spend an average of $800 each year on D-I-Y projects,” the report says, which is “some 90% more than owners with lower incomes.”
Baby boomers, who are now moving steadily into their 50s, still dominate the remodeling market and accounted for 52% of total improvement spending in 2003, Apgar said, “but Generation X is starting to come on strong, growing rapidly in homeownership” and accounting for 28% of remodeling expenditures in 2003.
The 30-somethings who comprise the Generation X group are already spending as much on remodeling as the baby boomers spent when they were at the same age, Apgar said, with household outlays averaging $2,200 in 2003.
However, when it comes to remodeling, Gen Xers are more likely to do the work themselves, he said. In 2003, D-I-Y accounted for 41% of the younger generation’s spending on home improvement, compared to a 26% share for baby boomers.
Older households, Apgar added, may spend less on improvements as they age and find themselves living alone or in an empty nest and not needing additional space, but their use of professional remodelers goes up.
The Harvard report notes that assessing Gen X remodeling demand is complicated by the fact that it includes a large share of minority and immigrant households, groups with potentially different home imrpovement needs. Minority participation in the remodeling market has been up across the board, Apgar noted, and Hispanics just about doubled their total remodeling expenditures over the past 10 years.
“Will Gen Xers maintain their D-Y-I activity?” Apagar asked. “Don’t worry about this group being absent from the remodeling scene.”
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