According to the US National Association of Home Builders, Americans spend more than US$200 billion on home improvements each year.
The most recent data from Construction Spending showed that spending on residential improvements fell to a seasonally adjusted annual rate of US$173 billion in March 2019, down by -3.1% over February estimate, and was -14.1% lower than a year ago, said the NAHB Eye on Housing blog May 14.
Residential Improvement Spending has experienced weakness after reaching the peak of US$216.7 billion in April 2018. The recent downward trend in improvements spending mirrors the recent softness of NAHB’s Remodelers’ Market Index.
From June 2009 through the first half of 2013, spending in the US on residential improvements continued to recover, but remained relatively flat, with an average monthly increase of +0.1%. US residential improvements spending experienced a robust growth in 2013-2018. From around US$116 billion in July 2013, it increased to US$216.7 billion in 2018, in April hitting the new record high. The average annual change of improvements spending during 2013-2018 was around +13%.
Looking more closely at the history, according to the annual US Remodeling Cost Value Report, the 2013 national average cost-value ratio rose to 60.6%, ending a six-year decline. This ratio represented nearly a three-point improvement over 2011-12, and was more than a half-point higher than the ratio from 2009. Lower construction costs were the principal factor in the upturn, especially when measured against stabilizing house values.