Americans Invested a Record $567 Billion in Home Repairs in 2023: Aging Homes Drive Renovation Surge

Higher mortgage rates have prompted homeowners to prioritize essential repairs for increasingly aged homes, reveals a Harvard study.

In 2023, Americans poured an unprecedented $567 billion into home renovations as rising mortgage rates and soaring home prices discouraged moving, according to Harvard’s Joint Center for Housing Studies.

The average age of U.S. homes is at an all-time high, necessitating urgent repairs and ongoing maintenance. Additionally, there is a growing emphasis on investing in energy efficiency, disaster resilience, and accessibility improvements to address climate change and an aging population. The rise of remote work has further fueled this renovation boom.

Key Insights

• In 2023, home improvement spending reached a record $567 billion nationwide.
• Approximately 3 million homeowners and 4 million renters live in homes with failing systems like heating or plumbing.
• Non-essential projects such as kitchen remodels made up just over 30% of total home improvement costs.

Spending on home repairs and improvements grew 16% annually between 2019 and 2023, more than double the historic 5% average. Although growth is expected to moderate in 2024, experts anticipate continued expansion of around 2.5%, according to report co-author Abbe Will.

"Today, half of all owner-occupied homes in the U.S. are over 40 years old," Will explained. "While market challenges may slow spending growth this year, we still expect modest increases as homeowners focus on necessary upgrades."

Replacement projects—such as roofing, siding, windows, doors, electrical, plumbing, and HVAC systems—dominated expenditures, accounting for 48% of spending in 2023. Meanwhile, discretionary projects like kitchen and bathroom remodels and room additions represented just over 30% of total spending.

"As homes continue to age, replacement projects have become the largest segment of home improvement investments," Will added. "These essential repairs can rarely be postponed indefinitely, driving nearly half of all homeowner expenditures today."

The renovation surge is also influenced by aging millennials purchasing and updating their first homes, along with increased activity among homeowners of color.

"The growing involvement of diverse homeowners and younger generations who are entering peak home buying and remodeling years points to sustained remodeling trends," Will noted.

The report highlights that in 2023, around 3 million homeowners and 4 million renters lived in substandard homes with structural issues or non-functional systems such as heating, plumbing, or electrical.

Many of these homes belong to lower-income households least able to afford necessary repairs.

"Deteriorating housing systems pose significant health and safety risks for older, low-income homeowners, and high repair costs threaten the affordable housing supply," the report states. "Racial and ethnic disparities in home equity exacerbate inequalities in housing quality, accessibility, energy efficiency, disaster recovery, and maintenance burdens."

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