Armed with record amounts of home equity and an expressed desire to remain in their homes as they age, older homeowners are driving the home improvement market.
A recent study by the Joint Center for Housing Studies at Harvard University revealed that households 55 and older account for half of all current home improvement spending.
And, as Baby Boomers reach their 70s and 80s, researchers say their investments in home modifications to enhance accessibility will soar.
Home improvement spending set a new high in 2017, reaching $424 billion, according to the report, which attributed the upward trend to a steady increase in home prices and an aging population.
“Rising house prices are good news for the remodeling market in that they are associated with higher home improvement spending,” the report stated. “Knowing that their homes are increasing in value provides owners an incentive to invest in their properties.”
Rising home prices also translates to rising equity levels.
The report notes that with more equity in their homes, owners have “a ready source of funds if they want to finance their projects.”
Older homeowners are also living longer and are increasingly willing to spend money on home improvements that will allow them to age in place.
Nearly 3 million homeowners, of which more than 72% were at least 55 years old, said they were taking on one or more projects that would improve accessibility.
Further, the report revealed that homeowners who are remodeling to enhance accessibility spend significantly more than those with other motivations.
The facts led the Harvard researchers to conclude that homeowners need access to more ways to finance their home improvement projects, especially as it becomes critical that the dated housing stock be updated to accommodate an aging population.
“Expanding the ability of owners to pay for improvement projects over time – whether through home equity loans or lines of credit, cash-out refinances, or contractor-arranged financing – would not only generate considerable growth in the remodeling industry, but also help to preserve and modernize the nation’s aging housing stock,” the report concluded.
