February 1, 2005
Publication:
Joint Center for Housing Studies, Harvard University
The residential remodeling industry now rivals home building in size, generating expenditures of about $150 billion a year and accounting for about 2% of gross domestic product (GDP). Indeed, because remodeling activities often stimulate additional spending for such items as home furnishings, major appliances, and lawn and garden products, these numbers understate the industry's importance. Beyond its contribution to the economy, the remodeling industry plays a critical role in preserving and enhancing the nearly 120 million units that comprise the nation's $8 trillion investment in housing. The remodeling decisions of almost 70 million property owners have direct consequences for the health and safety of residents, as well as the satisfaction they derive from their homes. Still, almost no research exists on fundamental remodeling industry issues such as which households are most likely to make home improvements, and what their motivations for doing so are. More attention has been paid to understanding home building and how recent advances in design, materials, and technologies are being applied to new homes. But home building adds only about 1-2% to the housing stock each year. Remodeling, in contrast, is the process by which owners of the other 98-99% of homes strive to adapt their units to contemporary tastes and higher standards of health, safety, and comfort.
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