Construction Spending data shows residential improvement spending ticked downwards in March. Spending fell to a seasonally adjusted annual rate of $173 billion in March 2019, 3.1% lower than February estimates and 14.1% lower than a year ago. According to the National Home Builders Association's (NAHB) Eye on Housing blog, Residential Improvement Spending has experienced "weakness" since peaking at $216.7 billion in April 2018.
Private residential improvements, as defined by the Census Bureau in its series on Construction Spending, include spending on remodeling, major replacements, and additions to owner-occupied housing units. Maintenance and repair are thus excluded, as is any spending on rental and vacant properties.
Residential improvements spending experienced a robust growth in 2013-2018. It increased to $216.7 billion, hitting the new record high in April 2018, from around $116.0 billion in July 2013. The average annual change of improvements spending during this period was around 13%. The strong growth of residential improvements was largely driven by the aging of household stock and the aging of homeowners. The aging of housing stock, one of the consequences of modestly improving but still relatively low new construction during the past decade, has contributed to the growth of residential improvements. Half of owner-occupied homes were built before 1980, which require some replacements and/or additions of new amenities. The aging of homeowners was another factor, as the share of remodelers undertaking projects to accommodate aging-in-place increased significantly between 2013 and 2017.
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