New research from the Harvard Joint Center for Housing suggests that the economy shrank in 2020. But despite this, demand for home improvements surged. While the data indicate the output contracted by more than 3.5 percent last year, spending on home repairs actually grew by 3 percent, beating expectations. The growth marked the tenth consecutive year of expansion for the industry. The last time the sector was in contraction was during the financial crisis that spanned 2007-2010.
But why has spending on home improvements gone up so much during the pandemic, despite the strain on people’s incomes? Let’s take a look.
The Return Of The DIY Mentality
While the economy was good from 2011 to 2019, people relied on professional contractors to carry out work on their properties. However, thanks to financial concerns in the aftermath of the pandemic, there was a switch to more do-it-yourself (DIY) work. Many employees were at home more and so took the opportunity to use their spare time productively. Instead of paying a professional to come over and fix up a room for them, they did it themselves.
DIY projects, therefore, are enjoying renewed popularity, especially in lower-income metro areas. According to a homeowner survey reported in the LBM Journal, more than 60 percent of people had begun some sort of home maintenance or renovation project in the first two or three weeks of lockdown. And by May, around two months into the pandemic in the US, the number was more than 80 percent.
Increasing Frequency Of Natural Disasters
Researchers also believe that climate change might be impacting the amount Americans are spending on home repairs. The increasing frequency of disasters, they say, is leading to more home damage necessitating repairs.
For instance, disaster repairs reached an estimated 10 percent of total home improvement expenditures in 2020; a massive $26 billion. A lot of this spending, according to researchers, was due to tornadoes and hurricanes in the southeast of the country, like Florida, its important to have an Ocala Roofing Company on speed dial. For instance, more than 41 percent of all home repair spending was in the Houston area following hurricanes that hit the region in 2019 and 2020.
Furthermore, spending on many other goods and services went into freefall during the pandemic. People spent less on transport because there was nowhere to go. And they spent less on overseas travel too, thanks to the shutdown of international flights and holiday destinations.
With these major items off the menu, money in people’s accounts soon began piling. And, before long, many homeowners got the itch to spend. Their houses became the obvious choice.
In the immediate aftermath of the arrival of the pandemic, many homeowners put off working on their properties. But as it became clear that the coronavirus was here to stay, many began DIY renovation projects, such as installing modern cabinets, alongside remote work. Combined with the upturn in multi-generational households, the demand for renovations and home improvements has never been higher.
That home improvement demand should go up during the pandemic seems counterintuitive. But the driving factors make sense once you understand the underlying economics of the situation.