Most homeowners are obliged to spend on their homes fairly constantly, whether for general home maintenance or for more intensive improvements. We look at both the average costs of maintenance and the most common forms of improvement, to give a better idea of where the industry should be focusing in the coming year. Seeing as the house retail and new build markets are still in a bit of a slump, we also looked at homeowners that chose to do a gut rehabilitation which may become more popular as the more cost-effective option.
A Look at Home Based Expenditure According to the Figures
We used data from the U.S Census Housing Survey of 2017 released this September to create the three visuals in the above graphic, namely expenditure on home maintenance, the number of homes that have had a gut rehabilitation and the top three reasons for home improvements. The first shows home maintenance spending can fall anywhere from $0 to more than $2400 per year. 33% of homeowners polled spent $200-$599 on maintenance, this bracket was by far the largest with the next bracket representing only 16% of the polled who spent $600 to $1,199, 14% of those polled said they did not spend on any maintenance, 10% said they spent $1,200 to 2,399 and 8% represented the highest and lowest brackets, with the highest spend being $2,400 or more and the lowest spend only $200 or less.
The second visual shows that of the 73,590 homeowners with homes built more than 10 years ago that were polled; 20% (14,600 owner-occupied homes) did a complete gut rehabilitation, stripping their home to its structural shell and then re-building, compared to the majority of 79%(58,200 owner-occupied homes) who didn’t (over 1% didn’t respond).
Finally, the third visual shows the top 3 reasons for home improvements that were made in the last two years, namely energy efficiency, accessibility for the elderly and disabled, and preparing the house for sale. These figures represent the main areas of expenditure for existing homeowners and give an indication of a trend towards homeowners keeping their current home, rather than buying upwards. It follows that should this trend persist, homeowners will maintain their homes better with a view to longevity, and if a change is needed then they would make improvements to their existing homes.
A Look at What These Figures Mean for the Construction Industry
Maintenance costs for the home can vary from free; monthly maintenance that takes time but doesn’t cost, like inspections of gutters and cleaning of filters, all the way to big-ticket items like replacing appliances or paying professionals for servicing. New homeowners can be blissfully unaware of the length of the list of possible maintenance tasks so this could be an opportunity for industry professionals to advertise their services in alignment with seasonal maintenance requirements.
Of the 77,310 homeowners polled, minimum expenditure would be more than $7,8 million in the largest bracket of 33%, if the minimum spend of $200 is calculated. However, though the highest spend bracket represents almost the smallest share of only 8%, spend for this bracket exceeds even the 33% lion’s share, with a total spend of $14 million, even if the minimum of $2,400 is spent. The total potential for maintenance earnings from those polled, looking at only the minimum spend for each bracket, amounts to nearly $45,5 million annually.
As always, it seems making improvements with an eye to saving is top of the list, with energy efficiency representing over 30% of those polled. Improving energy efficiency not only offers long-term cost savings but also usually offers eco-friendly benefits as well.
The second largest cause for home improvements was to allow for accessibility for the elderly and disabled, which suggests that homeowners are choosing to stay in their homes to an older age, or families are choosing to welcome older generations to share their homes, rather than opt for retirement/care institutions. This could also be due to the fact that the portion of the population that is 65 or older is now 45 million and that figure is set to double by 2060.
Only 3% of those polled chose to make improvements to prepare the home for resale, which could again be a result of the slump in the housing sales market mentioned above.
Perhaps the most drastic option for home improvement, the gut rehabilitation sees the house completely stripped to its frame and then rebuilt with the new look in mind. Of the 73,590 homeowners polled in this regard, only 20% had chosen this option. Considering this is a fairly costly exercise this 20% still represents a high number of homeowners, and again may be due to homeowners choosing not to buy a new home because of the housing market downturn. Of course one could have chosen to do a gut rehab in order to prepare the house for sale, so this could also be a motive. Either way, the 79% of homeowners that did not complete this level of renovation may fall into the two above categories and may have felt that it was not necessary, rather than choosing not to due to cost.
The TakeAway Points
It is common knowledge that the housing sales market is in a slump and this could be leading homeowners to make do with what they have, spending more time and energy on their existing homes. This bodes well for industry service providers as the cash flow in the industry will probably just shift from new builds to maintenance and repair of existing homes. Unfortunately for homeowners, expenses will arise either way and all it takes from industry experts is to ensure they are offering the right products to meet market’s demands.