Disasters Are a Growing Force in the Home Improvement Market
Spending on repairs due to weather- and climate-related disasters accounts for a growing share of all remodeling spending, according to our recent Improving America’s Housing 2025 report. In 2022 and 2023 combined, spending to repair damages caused by hurricanes, tornadoes, wildfires, flooding, and other catastrophic events represented 6 percent of all improvement expenditures nationally, up from less than 4 percent two decades earlier.
This increase in spending comes as the number of billion-dollar disaster events has soared in recent decades. In 2023, the US experienced a record-breaking 28 disasters for which damages reached or exceeded $1 billion, according to the NOAA Billion Dollar Weather and Climate Disaster database. So far, the 2020s have averaged 23.0 events per year, far exceeding the average of 13.1 individual billion-dollar disaster events annually in the 2010s, 6.7 per year in the 2000s, 5.7 in the 1990s, and 3.3 in the 1980s, after adjusting costs for inflation.
As a result, disasters have spurred significant repair and rebuilding activity (Figure 1). Homeowners spent an average of $23 billion annually in 2021–2023 repairing damages from disasters. This was up from less than $9 billion in 2003, after adjusting for inflation. Homeowners who restored their home after a disaster spent an average of $22,100 in 2023, up from an inflation-adjusted $17,900 two decades earlier.
Figure 1: Growth in Severe Storms Has Fueled the Disaster Repair Market
Notes: Billion-dollar disasters are events that generate over $1 billion in damages after adjusting for inflation. Disaster repairs are a subset of improvement spending on owner-occupied homes. Disaster repair spending is a three-year rolling average adjusted for inflation using the CPI-U for All Items.
Source: JCHS tabulations of National Oceanic and Atmospheric Administration, US Billion-Dollar Weather and Climate Disasters; and HUD, American Housing Surveys.
Even as disaster repair spending has trended up, the level of spending and its share of the overall home improvement market has fluctuated in response to particularly severe storm seasons or catastrophic events (Figure 2). These events have contributed to significant geographic variation in expenditures. For example, in the aftermath of Hurricane Sandy in 2012, disaster repair expenditures in the Northeast more than tripled to $17.3 billion across 2012 and 2013 relative to the prior two years. In these years, the Northeast accounted for fully 42 percent of all disaster repair spending nationally, well above the historical average share of less than 8 percent in the preceding decade. Similarly, the impacts of Hurricanes Harvey and Irma in 2017 contributed to a massive $39.9 billion in disaster repair expenditures in the South across 2018 and 2019, with the region accounting for two-thirds of total disaster repair outlays nationally in that period. These effects can be especially pronounced at the market level, with disaster repair spending accounting for 51 percent of home improvement spending in New Orleans in 2022–2023, following Hurricane Ida in 2021.
Figure 2: Severe Storms Push Up Regional Disaster Repair Activity
Notes: Disaster repairs are a subset of improvement spending on owner-occupied homes. Expenditures are adjusted for inflation using the CPI-U for All Items.
Source: JCHS tabulations of HUD, American Housing Surveys.
The impacts of severe storms are rarely short-lived, with local markets often seeing elevated remodeling spending for several years after a disaster. Some of this extended time frame is due to the slow administrative process of disaster assistance and recovery funding. It can take months to years for insurance companies to pay out claims, for owners to determine their financial capacity to address uncovered damages, and for public or philanthropic assistance to reach owners without insurance to cover repair costs. Repair projects can also be delayed due to constraints on labor capacity and supply chains, as local contractors and remodelers may struggle to meet surging demand following an event.
Though large disasters drive significant spending, a wider range of environmental hazards increasingly affect every part of the country and contribute to growth in the market. In 2023, damages from hurricanes and tornadoes accounted for 31 percent of homeowners’ disaster repair outlays, while fires accounted for 16 percent, and flooding 8 percent. However, the plurality of expenditures was due to other disasters such as hailstorms, snowstorms, and windstorms, which accounted for 45 percent of disaster repair outlays.
Given the growing scale of disasters and their damages, the need for disaster mitigation retrofits that make homes more resilient is increasingly urgent. Mitigation projects include strengthening roofs against high winds, elevating mechanical equipment or entire homes above flood levels, and replacing exterior materials with noncombustible alternatives. Although few homeowners undertake mitigation projects, growing hazard exposure and skyrocketing hazard insurance premiums will likely motivate more homeowners to do so.
For many homeowners, however, the cost of repairing damages after a disaster or undertaking a mitigation project is beyond their means. In 2023, $34 billion (30 percent) in total disaster losses for homeowners were not covered by insurance, according to the Congressional Budget Office. As lower-income homeowners consistently spend less on repair and improvement projects of all types, a range of public- and civil-sector assistance options have emerged to help fill gaps in meeting these needs. The Federal Emergency Management Administration (FEMA) Individual Assistance program is the largest source of post-disaster recovery, distributing $1.3 billion to households in 2023, some of which was used to cover repair costs. HUD’s Community Development Block Grant Disaster Recovery (CDBG-DR) program supplies funding to state and local governments to recover from disasters and is the largest source of disaster repair funding, with required set-asides for unmet needs of low- and moderate-income households.
Yet recent federal policy changes leave the future of home mitigation and post-disaster assistance uncertain. The administration has sought to reduce FEMA’s role by limiting federal disaster declarations, which would shift a greater burden of disaster recovery onto states, many of which do not have the reserves to compensate. In April, FEMA also announced the cancellation of the Building Resilient Infrastructure and Communities (BRIC) program, which has funded infrastructure investments and pre-disaster mitigation for homes since its inception in 2020. While several states have sued to block the removal of their BRIC funding, if the cancellation goes forward it could eliminate an estimated $3.3 billion in hazard mitigation funding across all states.
Independent of these policy shifts, the increasing frequency and intensity of weather- and climate-related disasters will continue to reshape the scale and focus of the remodeling industry in the coming years. Disaster reconstruction is poised to be a major driver of growth in the home improvement industry, with increasing hazard exposure spurring significant demand to repair and fortify existing homes. Meeting this need will require a sector of specialized contractors, remodelers, and skilled trade workers to carry out the work of addressing damages and improving resiliency in the housing stock. How and which homeowners can afford to make these improvements to their homes, meanwhile, may widen inequities in housing quality and wealth accumulation, which already unevenly distribute households’ exposure to damages from major disasters.
