How much is spent on remodeling each year?

When it comes to a rough approximation of the “remodeling industry,” the figure I hear most frequently is “around $300 billion annually.”

To better understand this figure, we should first note that most estimates are based off some section of primary data gathered by the US Census, so this is a good place to start.

The Value of Construction Put in Place Survey (C-30)

The C-30 provides monthly estimates for the total dollar values of construction work done in the US. Its methodology considers a range of primary data sources. Of note:

• New private residential construction estimates come from their Survey of Construction;
• Private residential improvement expenditures comes from their Consumer Expenditure Survey, based on interviews with 7,500 owner-occupied housing units.

In 2013, that around $332 billion was spent on what they define as “private residential construction including improvements,” broken down as follows:

This view may suggest that the total market for residential improvements is closer to $130 billion, however it is incomplete for the following reasons:

• It doesn’t include “maintenance” expenditures (e.g. repair/replacement)
• It doesn’t include any expenditures made to rental, seasonal or vacant properties.

To help address these shortcomings, its useful to reference the US Census’ American Housing Survey (AHS) 2011 survey (this was the most recent).

The American Housing Survey

The AHS collects a significantly larger amount of primary data (around 155,000 housing units) than the C-30 although its intention is to create a much more nuanced, detailed view of the housing market as opposed to the C-30, which serves as more of an ongoing index.

This survey provides improvement expenditure estimates for the 76 million owner-occupied units (but not for the 39 million renter-occupied units or 13.3 million vacant units). They estimate this figure at $358.5 billion over a two-year period (2009 – 2010) or about $180 billion per year, which is a significantly higher figure than that offered by the C-30.

Although the offer insight into maintenance expenditures, their publicly available data isn’t very easy to tabulate although thankfully, we can look to the Harvard Joint Center for Housing Studies (JCHS) for help in this area.

Harvard Joint Center for Housing Studies (JCHS)

The JCHS has taken the AHS and a discontinued US Census Index (the C-50) that measured residential improvements and repairs and helped make sense of it all. According to their analysis of the Census’ data, they estimate that total expenditures on improvements and maintenance to owner-occupied and rental units was about $275 billion in 2011.

Another way to look at expenditures involves separating DIY expenditures from “Professional” expenditures (in which a professional mediates the improvement). Within the $176 billion slice (improvements to owner occupied units), that division breaks down as follows:

It is unclear what percentage of the $29 billion spent on improvements to rental properties can be attributed to professionals. If we apply the ratio seen within owner expenditures, we can estimate that the total spent via professionals on home improvements is around $169 billion.