New York’s $12 Billion Remodeling Market is the Largest Among Major Metro Areas
In 2017, New York’s $12.2 billion market for home improvements was about 45 percent greater than the next largest markets in Los Angeles ($8.6 billion) and Chicago ($8.2 billion). Yet, just as local housing markets are unique, so too are local remodeling markets. Large differences in home improvement expenditure and project composition exist in metros across the country, according to analysis of 25 major metro areas available in the latest American Housing Survey (AHS) and included in a recent report from our Remodeling Futures Program, Improving America’s Housing 2019.
Our interactive map shows that aggregate home improvement spending varies considerably among the 25 major markets from about $1 billion in places like Birmingham, Las Vegas, Oklahoma City, Richmond, and Rochester to $6–12 billion in Chicago, Dallas, Los Angeles, New York, and Washington, DC. Average per owner home improvement spending is about 12 percent higher in these larger markets at $3,800 compared to $3,400 in the smaller markets. But of course, the larger markets have many more homeowners—on average 2.2 million—compared to about 330,000 owners in each of the smaller remodeling markets.
Average per owner improvement expenditure also varied significantly from about $2,300 in Detroit, Miami, and Riverside in 2017 to over $5,100 in Minneapolis and San Francisco. One reason for this variation is differences in house price appreciation. In general, homeowners spend more on improvements in markets where price appreciation is strong. For example, median home prices increased about 30 percent between 2007 and 2017 in Boston, San Francisco, and San Jose compared to 5 percent nationally, and the typical homeowner in these areas spent 50–70 percent more than the US average for home improvements in 2017. Whereas owners in metros where home prices have not yet recovered to their prior peaks, such as in Las Vegas, Miami, and Riverside, spent 10–25 percent less on home improvements than nationally.
Across the country, the aging of both the housing stock and the population has contributed to an increasing share of spending on the replacement of worn home components and systems (like roofing, HVAC, and insulation) from 40 percent of total improvement expenditures historically to almost 50 percent today. Yet, again, the share of local home improvement markets devoted to replacement projects differs markedly among major metros from less than 40 percent in San Francisco and San Jose to 55–57 percent in Dallas, Detroit, and Atlanta. Many common replacement projects are also directly related to home energy use, and in metros with relatively old housing stocks and harsh winter weather conditions, large shares of owners make retrofits to improve the energy-efficiency of their homes. Between one in five and one in four homeowners in Boston (23 percent), Chicago (20 percent), Detroit (21 percent), Minneapolis (26 percent), and Rochester (22 percent) remodeled for energy efficiency in 2017 compared to 17 percent nationally.