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Cause and Effect: The shortfall in home construction activity and more people staying put due to higher home prices and rising interest rates all contribute to robust activity for the home remodeling industry.
NAHB data shows that from the 1960s through the 1990s, builders produced about 1.5 million housing units per year. Since the Great Recession, however, they’ve produced far fewer. Home construction activity is still about 100,000 units shy of the historic norms on an annual basis.
As homebuilders strive to churn out more homes to overcome the existing shortfall and account for population growth, the typical age of existing homes has risen dramatically higher. So, it’s no surprise that the U.S. is in the midst of a remodeling boom. With rising home prices, owners sitting on record levels of equity and unwilling to give up their low interest rate loans are staying put and remodeling to make modifications to their homes. Last year, mortgage lenders authorized $275 billion in home equity lines of credit (HELOCs) to U.S. homeowners.
According to 2021 American Community Survey data released earlier this year, American homes have never been this old. In 2006, the median age of a home was 31 years. The U.S. Census Bureau reports that the median age of the nation’s owner-occupied homes has now surpassed 40 years for the first time.
The kitchen remains the room homeowners most frequently remodel. What’s trending in appliances? countertops, floors and cabinets?
