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Residential Remodeling Industry Facts, Statistics and Trends for 2023
The residential remodeling industry is a dynamic and constantly evolving sector that has a significant impact on the economy and homeowners alike. With the changing needs of homeowners, advancements in technology, and shifting demographic trends, the residential remodeling market is set to experience exciting new developments in 2023. In this article, we will take a closer look at the latest facts, statistics, and trends in the residential remodeling industry, providing valuable insights into what we can expect to see in the year ahead
From the growing popularity of aging-in-place renovations to the increasing demand for sustainable and eco-friendly remodeling, we will cover all the key trends that are shaping the industry. Whether you’re a homeowner, contractor, or simply interested in the residential remodeling market, this article will provide you with the information you need to stay ahead of the curve.
Key Take-Away: If you are a remodeling contractor, see how can you implement these trends and forecasts to propel your renovation company ahead of the competition in 2023.
Table of Content
- The rise of aging-in-place remodeling (Click Here)
- The increasing demand for sustainable and eco-friendly remodeling (Click Here)
- The impact of smart home technology on residential remodeling. (Click Here)
- The role of professional contractors vs DIY projects in the industry. (Click Here)
- Regional differences in the residential remodeling market. (Click Here)
- The influence of demographic trends on the market/ (Click Here)
- The financial benefits of home renovations for homeowners. (Click Here)
- The trend of open-concept design in residential remodeling. (Click Here)
- The role of 3D visualization and virtual reality in the planning process. (Click Here)
- Insights from Leading Sources. (Click Here)
Aging-in-Place
The rise of aging-in-place remodeling is a major trend in the residential remodeling industry that is driven by the aging baby boomer population. According to the National Association of Home Builders (NAHB), this demographic is driving demand for home renovations that allow them to live comfortably and safely in their homes as they age. The popularity of aging-in-place remodeling has been growing steadily in recent years, and this trend is set to continue in 2023 and beyond.
One of the key features of aging-in-place remodeling is the integration of universal design principles. These principles aim to make homes more accessible and user-friendly for people of all ages and abilities, with features such as wide doorways, roll-in showers, and grab bars in bathrooms. Another popular aspect of aging-in-place remodeling is the integration of smart home technology, which can help to increase safety, security, and convenience for older homeowners.
According to a report by the Joint Center for Housing Studies of Harvard University, the number of homeowners aged 65 and over who reported having at least one disability increased by 43% between 2000 and 2017. This increase in the number of older homeowners with disabilities has driven demand for aging-in-place renovations, as these individuals seek to make their homes more accessible and comfortable.
The aging-in-place trend is not limited to the U.S., as similar trends are being observed in other countries around the world. A report by ResearchAndMarkets found that aging populations in Western Europe are also driving demand for home renovations that allow them to live comfortably and safely in their homes as they age.
In Conclusion
The rise of aging-in-place remodeling is a major trend in the residential remodeling industry that is set to continue in 2023 and beyond. This trend is driven by the aging baby boomer population, and it is characterized by the integration of universal design principles and smart home technology.
Sources:
- National Association of Home Builders (NAHB) (https://www.nahb.org/research)
- Joint Center for Housing Studies of Harvard University (https://www.jchs.harvard.edu/research/key-trends-us-housing)
- ResearchAndMarkets (https://www.researchandmarkets.com/research/mzt7hk/global_residential)
Demand for Sustainable and Eco-Friendly Remodeling
The world is changing and so is the demand for sustainable and eco-friendly remodeling. Homeowners are increasingly looking for ways to make their homes more energy-efficient while reducing the environmental impact of their remodeling projects. According to the US Green Building Council, sustainable remodeling is on the rise, with more than half of homeowners (58%) saying they would be willing to pay more for a home remodeling project that is environmentally friendly.
The trend is driven by a growing awareness of the environmental impact of remodeling, as well as by the cost savings associated with eco-friendly materials and energy-efficient appliances. In addition, the cost of materials for sustainability-focused projects is becoming increasingly competitive, making it more accessible for homeowners to make their homes more sustainable.
The demand for sustainable remodeling has also been driven by the emergence of green building certifications, such as LEED (Leadership in Energy and Environmental Design) and Energy Star. These certifications provide homeowners with a way to verify that their remodeling projects meet certain standards for energy efficiency, water conservation, and indoor air quality.
Finally, the demand for sustainable remodeling is being driven by the increasing availability of eco-friendly materials. Recycled materials, such as bamboo, cork, and recycled plastic, are becoming increasingly popular and are often more cost-effective than traditional materials. Furthermore, there is a growing selection of low-VOC (volatile organic compounds) paints and finishes, as well as energy-efficient appliances, such as LED lighting and solar panels.
In short
the demand for sustainable and eco-friendly remodeling is on the rise, driven by a growing awareness of the environmental impact of remodeling and the cost savings associated with eco-friendly materials and energy-efficient appliances. Homeowners are increasingly willing to invest in projects that reduce their environmental footprint and make their homes more energy-efficient.
Sources:
US Green Building Council, “Sustainable Home Remodeling Trends for 2021” https://www.usgbc.org/articles/sustainable-home-remodeling-trends-for-2021
Green Building Certification Institute, “LEED and Energy Star: What are the Differences?” https://www.gbci.org/blog/leed-and-energy-star-what-are-the-differences
Smart Home Technology
Smart home technology has become a popular trend for homeowners and has had a major impact on residential remodeling. This technology has changed the way homeowners think about remodeling projects, with many opting for a more connected and automated home.
According to a recent survey conducted by Houzz, an online home renovation resource, over 70% of homeowners are now incorporating smart home technology into their residential remodeling projects. These projects range from installing automated lighting, to connecting appliances and home security systems to the internet. Smart home technology is also being used to control climate and energy use, with many homeowners installing automated thermostats and energy-efficient lighting.
The impact of smart home technology on residential remodeling has been seen in a number of other areas as well. A survey by the National Association of Home Builders (NAHB) found that nearly a third of home builders now offer some form of smart home technology in their new construction projects. This includes features such as voice-activated assistants and automated lighting, as well as home security systems that can be controlled remotely.
Conclusion
The trend of incorporating smart home technology into residential remodeling projects is likely to continue to grow in the coming years. As technology advances, more homeowners are likely to look for ways to integrate automated systems into their homes. This could lead to more efficient and cost-effective remodeling projects, as well as providing homeowners with more convenience and comfort.
Sources:
Houzz. (2020). Smart Home Technology Survey. https://info.houzz.com/houzz-smart-home-technology-survey .
National Association of Home Builders. (2019). Home Builder Smart Home Survey. https://www.nahb.org/en/research/reports/home-builder-smart-home-survey.aspx .
Contractor Vs. DIYers
In recent years, there has been an increasing trend towards do-it-yourself (DIY) projects in the home remodeling industry. While DIY projects can be a great way to save money in the short term, they often lack the quality and expertise that comes with professional remodeling services.
According to a survey conducted by the National Association of Home Builders (NAHB), the remodeling industry is estimated to have grown by 10.3% in 2018, with a total of $450 billion in spending. Of that spending, a significant portion went towards professional contractors. Professionals provide a variety of services, from design and planning to installation and maintenance of remodeling projects.
Professional contractors bring a high level of expertise to home remodeling projects. They are experienced in the latest trends, designs and materials, and are up to date with the latest building codes and regulations. They also have the equipment and skills to complete any remodeling job safely and efficiently.
DIY projects, on the other hand, can be more cost effective in the short term, but often lack the quality and expertise of professional contractors. DIYers may not be aware of the latest trends and building codes, and may not have the necessary tools and skills to complete a project. Additionally, DIY projects can take up a significant amount of time and money, and may not be worth the effort.
In Conclusion
Professional contractors play an important role in the home remodeling industry. They bring a high level of expertise and quality to any project, and can help homeowners save time and money in the long run. DIY projects can be a great way to save money in the short term, but may not provide the quality and expertise of a professional contractor.
Sources:
National Association of Home Builders. (2019). Remodeling Market Index. https://www.nahb.org/en/research/remodeling/remodeling-market-index.aspx
HomeAdvisor. (2019). DIY vs. Hiring a Pro. https://www.homeadvisor.com/r/diy-vs-hiring-a-pro/
Regional Differences
The regional differences in the United States for the residential remodeling market are notable. For example, a study by the Joint Center for Housing Studies of Harvard University found that the West had the highest remodeling spending in 2016 at $95.2 billion, followed by the Northeast at $68.7 billion, the South at $63.4 billion, and the Midwest at $47.4 billion. It’s important to note that the West’s population is smaller than the other regions, thus resulting in higher spending per capita.
The West is also leading the way in terms of remodeling trends. According to the National Association of Home Builders, the top five projects for the West in 2018 were room additions, kitchen remodels, bathroom remodels, door replacements, and window replacements. Nationally, remodeling activity has increased steadily since the recession, and the West has been a driving force.
In terms of cost, the West is more expensive due to higher labor costs and higher materials costs, especially in metropolitan areas such as San Francisco, Los Angeles, and Seattle. According to HomeAdvisor, a national home services marketplace, the average project cost in the West is $9,899, while the average in the rest of the U.S. is $7,766.
Conclusion
It’s clear that the residential remodeling market varies across the United States, with the West leading the way in terms of spending and trends. Homeowners in the West should prepare for higher costs and contractors be aware of the latest trends.
Sources:
Joint Center for Housing Studies of Harvard University. (2017). Remodeling Expenditures by Region.
https://www.jchs.harvard.edu/state-remodeling-expenditures
National Association of Home Builders. (2018). Leading Indicator of Remodeling Activity (LIRA). https://www.nahb.org/en/research/housing-economics/leading-indicator-of-remodeling-activity-lira.aspx
HomeAdvisor. (2019). True Cost Guide: Home Remodeling Costs. https://www.homeadvisor.com/cost/
Demographic Segments
The remodeling market has been deeply affected by changing demographic trends in recent years. As Baby Boomers enter retirement age and Millennials come of age, remodeling demand has shifted to meet the needs of these two very different generations.
In the U.S., Baby Boomers have been the primary drivers of the remodeling market for the past decade, with the majority of remodeling spending coming from homeowners over the age of 55. This is expected to change as Millennials enter the housing market in increasing numbers. By 2020, Millennials are expected to account for 45% of all U.S. home sales and 35% of all remodeling spending.
Millennials have different preferences and needs than their predecessors. They are more likely to prioritize convenience and sustainability when it comes to remodeling and are less likely to invest in large scale projects such as home additions. They are more likely to focus on smaller projects, such as upgrading appliances, refinishing floors, and updating kitchens and bathrooms.
The remodeling market has also seen an increase in demand for energy efficient products as energy costs continue to rise. Homeowners of all ages are looking for ways to reduce their energy bills and are turning to remodeling and renovation projects as one way to achieve this goal. Energy efficient windows, insulation, and appliances are among the most popular products.
Summary
As demographic trends continue to evolve, the remodeling market will be sure to follow suit. Homeowners of all ages will be looking for ways to update their homes to meet their needs, and remodeling and renovation projects could be the answer.
Sources:
National Association of Home Builders, “Demographic Trends Will Impact Remodeling Market”, https://www.nahb.org/en/research/economic-studies/economic-impacts/demographic-trends-will-impact-remodeling-market.aspx
U.S. News & World Report, “Millennials Set to Dominate Home Buying Market”,
Return On Investment
Home renovations can be a great way for homeowners to make their living space more comfortable and add value to their home. Not only that, but the potential financial benefits of home renovations can make them a sound investment. According to the National Association of Realtors, homeowners who renovated their home recouped an average of 64.9% of the cost of the project when they sold their home. Additionally, homes that were renovated saw an average increase of 4.5% in value, while homes that were not renovated only saw an increase of 1.7%.
In terms of tangible financial benefits, home renovations can reduce energy costs through the installation of energy-efficient appliances and lighting. Replacing single-pane windows with double-pane windows can reduce energy costs by up to 24%. Installing insulation can also reduce energy costs, as well as provide soundproofing, which can be beneficial for homeowners who live in busy areas. Additionally, home renovations can increase the resale value of a home, which can be beneficial for homeowners who are looking to sell their home in the future.
Finally, homeowners can take advantage of tax breaks when they renovate their homes. For example, homeowners may be eligible for tax deductions if they install solar energy systems in their home. Additionally, homeowners may be able to deduct a portion of their home renovation expenses from their taxable income.
Conclusion
Home renovations can be a great way for homeowners to improve their living space and reduce their energy costs. Furthermore, they can provide financial benefits such as increasing the resale value of a home and providing potential tax breaks.
Source:
National Association of Realtors, “Remodeling Impact Report: Outdoor Features,” https://www.nar.realtor/research-and-statistics/research-reports/remodeling-impact-report-outdoor-features
Remodeling Design Trends
The trend of open-concept design in residential remodeling is growing, with many homeowners opting to tear down walls and increase the size of their living space. According to the National Association of Home Builders, open-concept design is one of the most requested features in remodeling projects.
Open-concept design has become increasingly popular for several reasons. First, it increases the overall size of the living space and creates a more open, inviting atmosphere. This allows homeowners to entertain more comfortably, as well as providing extra room for children to play. It also makes it easier to monitor young children while they play.
In addition, open-concept design can help to create a more modern look. Removing walls and creating larger spaces can give the home a more contemporary feel that appeals to many homeowners. This can also help to increase the home’s overall value, as buyers are often looking for features like open-concept design.
Finally, open-concept design can help to create a more energy-efficient home. Removing walls and enlarging the living space can help to reduce energy costs, as the open space will require less heating and cooling. This can help to make the home more eco-friendly and reduce the homeowner’s energy bills.
Conclusion
Open-concept design is becoming increasingly popular for residential remodeling projects. Whether homeowners are looking for a more modern look, extra living space, or energy savings, open-concept design is often the answer.
Sources:
National Association of Home Builders. Top 4 Trends In Remodeling. https://www.nahb.org/en/consumers/remodeling/top-4-trends-in-remodeling.aspx
Energy.gov. Home Remodeling: 6 Tips for Energy Efficiency. https://www.energy.gov/energysaver/home-remodeling-6-tips-energy-efficiency
3-D Planning
3D visualization and virtual reality (VR) have revolutionized the remodeling planning process by allowing homeowners to see the finished product before beginning any construction. 3D visualization tools provide an invaluable resource for homeowners, designers, and contractors to visualize, plan, and build a remodel project.
According to a survey by Houzz, 72% of homeowners who used 3D visualization tools to plan their home renovation were satisfied with their renovation projects, compared to 54% of those who did not use 3D visualization tools. This shows that 3D visualization can help homeowners make informed decisions, save time and money, and increase the chances of a successful remodel.
VR technology also has an important role to play in the remodeling planning process. VR allows homeowners to “walk through” the remodel project before any construction begins. This allows them to experience the space and make changes to the design before any work begins.
In addition, VR can be used by contractors to identify potential problems before the remodel begins. For example, a contractor can use VR to detect potential issues with a wall, such as a missing beam or a load-bearing wall that needs to be reinforced. This helps contractors save time and money by identifying potential problems before they start the remodeling project.
Summary
The combination of 3D visualization and VR is transforming the remodeling planning process. Homeowners, designers, and contractors are able to visualize and plan remodeling projects more effectively than ever before. This is leading to more successful remodeling projects and greater satisfaction among homeowners.
Expert Insights
When doing the research for this article, it seems different resources have varying opinions on the remodeling forecast for 2023. Some being quite optimistic and others pulling back on the growth after Covid’s remodeling and renovation boom. Let take a look at what the what they have to say.
Harvard University – Joint Center for Housing Studies
Their most recent Leading Indicator of Remodeling Activity (LIRA) predicts that annual growth in home renovation and maintenance spending will slow drastically, from 16.3 percent at the end of 2022 to a mere 2.6 percent by 2023.
The 2023 JCHS summary states that the slowdown in existing home sales, house price appreciation and mortgage refinancing activity has caused concerns for a broader economic recession and will cool home remodeling activity. Homeowners are likely to focus their spending on necessary replacements and smaller projects instead of high-end discretionary projects. Despite this, new benchmark data from the American Housing Survey shows that remodeling and repair spending increased 23.8 percent over 2020-2021 compared to 12.5 percent originally estimated which leads to a projected market size of $485 billion in 2023 – an increase of 10.2% over original estimates.
Forbes Home
Deane Biermeier, Resident Forbes Home Expert and General Contractor, expressed skepticism about a recent statistic predicting that home renovation activity will decline in 2023. Derek Walczak, Owner and General Contractor at Walczak Design + Build noted that his business was booming and inquiries were still coming in despite the potential decrease. He suggests that location, type of construction and who the company caters to could play a role in whether or not there is an actual decline.
Read the Article Here: https://www.forbes.com/home-improvement/home/drop-in-home-renovation-spending/
Kitchen & Bathroom Design News
This article states that despite headwinds such as declining home sales, rising interest rates and increasing costs of contractor labor and building materials, the remodeling market is still expected to grow in 2023 due to record levels of home equity, energy efficiency retrofits incentivized by the Inflation Reduction Act of 2022, as well as repairs and mitigation projects following Hurricane Ian.
Houzz Consumer Trends Research
The Houzz survey shows that despite economic uncertainty and supply chain issues, most homeowners have not cancelled their 2023 remodeling plans. Instead, 37% have already completed a project this year and 23% are planning to start a new project within the next 12 months. Homeowners expressed an interest in personalizing features in their current homes with bathrooms, kitchens, patios/outdoor living areas, home office spaces and laundry rooms as the most popular renovation locations. Overall, 86% of surveyed homeowners stated they were likely or very likely to remain in their current homes and pursue renovations rather than moving elsewhere.
Read the Full Study Here.
Wrap Up
There are some good insights into what remodeling companies should focus on in the near future. Personally, I feel that remodelers should focus on what they are good at. But, armed with this research they can or maybe should focus on what homeowners are already looking for. It simplifies the marketing and sales process.
As for the experts, I will leave you with this story on who to take advise from.
It was autumn, and the Indians on the remote reservation asked their new Chief if the winter was going to be cold or mild. Since he was an Indian Chief in a modern society, he had never been taught the old secrets.
When he looked at the sky, he couldn’t tell what the weather was going to be. Nevertheless, to be on the safe side, he replied to his tribe that the winter was indeed going to be cold and that the members of the village should collect firewood to be prepared.
Also, being a practical leader, after several days he got an idea. He went to the phone booth, called the National Weather Service and asked, “Is the coming winter going to be cold?”
“It looks like this winter is going to be quite cold indeed,” the meteorologist at the weather service responded. So the Chief went back to his people and told them to collect even more wood in order to be prepared.
A week later, he called the National Weather Service again. “Is it going to be a very cold winter?”
“Yes,” the man at National Weather Service again replied,”it’s definitely going to be a very cold winter.” The Chief again went back to his people and ordered them to collect every scrap of wood they could find.
Two weeks later, he called the National Weather Service again. “Are you absolutely sure that the winter is going to be very cold?”
“Absolutely,” the man replied. “It’s going to be one of the coldest winters ever.”
“How can you be so sure?” the Chief asked.
The weatherman replied, “The Indians are collecting wood like crazy.”
Good Luck Out There,
RJ Cooper
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