The remodeling and home improvement market is worth a record $424 billion, according to the Joint Center for Housing Studies of Harvard University, up 10% over 2015 and more than 50% since the low in 2010. Most homes in the United States are over 20 years old, and 40% are at least 50 years old, according to JCHS’s “Improving America’s Housing 2019” report.
But who’s driving that remodeling growth and, more important, how do contractors find those people?
Increasing home prices around the country have made it difficult for young people to purchase their first home. As a result, they’re doing so later than previous generations, but they’re also more likely to purchase an existing home and update it to suit their needs or preferences than to opt for new construction.
Over half of older millennials, those between the ages of 29 and 38, were first-time homebuyers last year, according to the National Association of Realtors’ “2019 Generational Trends Report.” Eighty-six percent of buyers under 29 were buying their first home, the report found.
Regardless of age, the vast majority of homes purchased were previously owned. Indeed, NAR found little variation between age groups who purchased existing homes over new construction. The report found 88% of older millennials and 94% of younger millennials purchased an existing home, compared with 81% of older boomers and 82% of younger boomers.
Jeff Proctor, vice president of Ascent Builders and Basement Partners in Broomfield, hasn’t seen that play out locally yet.
“We don’t really run into a lot of millennials yet because they’re buying the newer homes that don’t need the work done. They’re looking more for stuff that’s already finished more than stuff that they would remodel,” he said.
He added that older millennials “are more inclined to put the effort into it, but the [younger] ones, they want it all done. They’ve got better things to do.”
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The NAR report found that new-home buyers were in fact driven by an explicit desire to avoid making any kind of renovations when they moved in, while price and value were the top-cited reasons for buyers who purchased existing homes.
Chad Hall, founder of Remodelmate, a Washington, D.C.-based tech company that connects remodeling contractors with homeowners, notes that even when they are willing to make some changes when they move in to a newly purchased home, the younger demographic is less interested in the old ways of doing business.