Demographics and Remodeling
CAMBRIDGE, Mass. — At the Remodeling Futures Steering Committee meeting of Havard University’s Joint Center for Housing Studies held Nov. 8, a number of presentations by researchers and industry experts shed light on the immediate and long term future of the remodeling market.
The underlying numbers presented really appeal to my inner geek. And the demographic side of remodeling could not be more interesting. In a presentation entitled The Demographic Underpinnings of Future Remodeling Activity remodeling spending was broken down into “cohorts” of Americans. Leading edge baby boomers are now about 60. Trailing boomers are as young as 42. Generation X ranges from ages 31 to 41… and so on. What was clearly revealed by the research is that home remodeling spending is partially a function of age of the homeowner. The peak spending years are approximately 35 to 50. So it makes sense that the past decade has been one of incredible growth in remodeling spending… the largest cohort of Americans… leading-edge and trailing baby boomers have been moving through through prime spending years. And boomers are still spending and supporting our industry.
Lately, however, Generation Xers have moved into the picture in a bigger way. And though they are numerically a smaller group, at an individual level, it seems that Xers are spending at least as much if not more on remodeling. That is really good news for remodelers in the near and mid term future.
Keeping in mind that demographics is only one leg of the stool that supports the remodeling industry… along with an aging housing stock, a favorable economic environment for spending… in terms of sheer numbers the long term picture looks even better. By the year 2015, minorities are expected to contribute nearly one quarter of total spending on remodeling activity. This also makes sense… minority groups will comprise 24.7 percent of all homeowners in 2015.
The upshot is that remodelers should take some time to get to know the purchasing decisions and lifestyle needs of Gen Xers, and over the long term, they should cultivate relationships with minority buyers. These groups will truly shape the remodeling industry that is to come.