The other side of the housing boom is here: home-renovation projects.
As Americans were left with more time on their hands and more time in their houses, they began fulfilling their wildest HGTV fantasies. Home improvement and repair spending grew by nearly 3% to $420 billion in 2020, per a recent study by Harvard University’s Joint Center for Housing Studies (JCHS).
It’s only the beginning of the home improvement boom. Abbe Will, one of the report’s researchers, told Insider they expect the home remodeling market to expand even further in 2021 — by 4% — as homeowners complete discretionary and deferred projects.
When the pandemic hit, the remodeling market crashed before bouncing back stronger than it was pre-pandemic. “People did not want contractors in their homes, but that recovered very quickly,” Paul Emrath, vice president of surveys and housing policy research at the National Association of Home Builders (NAHB), told Insider. “It was a very sharp V-shaped recovery.”
The surge isn’t just a newfound pandemic hobby or some post-pandemic repair, but a natural evolution of a very heated housing market. Remote work, the desire for more space, and low interest rates made real estate the hottest commodity of 2020. The demand for housing, led by millennials, exacerbated a shrinking housing inventory and caused prices to skyrocket to record highs.