US Home Improvement Consumer Insights 2022

Report Overview

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Home improvement activity is an important aspect of the construction and building supplies industry, so an investigation into consumer trends can give insight to marketing and product development opportunities.

This report contains analysis and data-based discussions of various pieces of the home improvement industry, including a look at homeownership rates, buying patterns, demographic trends, and other consumer insights.

This report includes analysis, data, trends, and customized cross tabs using two survey resources:

• data from The Freedonia Group’s proprietary national online survey conducted from February 2021, June 2021, August 2021, October-November 2021, November-December 2021, and February 2022
• data from syndicated national consumer survey results from MRI-Simmons Fall 2011-2021 Reports

Historical Trends

Between 2011 and 2019, homeownership declined slightly from 68% to 65%, despite recoveries in the housing market and the general economy since the 2007-2009 recession. Continued declines in ownership have been due to a lagging recovery for many consumers’ budgets as well as high housing prices that have proved prohibitive for many households. Additionally, the increased migration to urban areas has favored renting over owning. During the same period, the percentage of those renting increased from 30% to 34%.

Since 2019, however, homeownership rose to 71% and rentals declined to 26% as:

• lower mortgage rates increased the affordability of homeownership
• pandemic aid gave consumers unexpected income to move housing
• remote work trends gave consumers the flexibility to move to either a preferred or more affordable location for home buying
• remote work and remote schooling for many families during the pandemic led more households to look for homes with more space and thus move from smaller rentals to larger owned homes

Homeownership vs. Rental Rates: Age Groups

As with overall trends, homeownership by age generally declined from 2011 to 2019 and then increased in 2020 and 2021.

• Declines during the 2011-2019 period were the sharpest for the 25-34 age bracket (from 52% to 44%), which largely included millennials during this period:
  • This generation saw the effects of the housing crisis on their families, which increased skepticism about the long-term value of homeownership, particularly as many members of this cohort have been saddled with high debt from higher education.
  • Additionally, millennials are more likely to live in urban areas where rental properties are more common.
  • In general, younger age groups are more likely to reside with their parents, who may own their homes. Hence, reported homeownership rates among these groups tend to skew higher than the actual rates.
• From 2011 to 2019, the 35-44 age group (which included much of Generation X during this period) saw declines in homeownership; many purchased at the height of pre-recession real estate prices and were forced out of homeownership because their mortgages were greater than the value of their homes. The difficulties of obtaining mortgages in the historical lending environment have also kept many from returning.
• Homeownership rates fell from 2011 to 2019 for those aged 45 to 64 as the aging baby boomer cohort continued to retire and downsize living arrangements by moving into smaller homes or into rentals, which facilitates their aging in place by reducing maintenance and other household responsibilities.

From 2011 to 2019, homeownership rates declined among older age groups, but stayed at a much higher rate. Older consumers, particularly those over retirement age, are more likely to have already owned a home and had significant equity with limited or no remaining balances on their mortgages before the economy collapsed during the Great Recession.

In 2020 and 2021, trends in homeownership changed direction for all age group. For the most part, rates recovered to about 2011 levels. However, the 18-24 age group saw rates exceed 2011 levels. Younger consumers groups benefited from programs aimed at first-time homeowners. However, this youngest group of adult consumers (18-24) also saw rising rates of living rent-free (up to 8% by 2021). Many younger consumers moved home with their parents or other family members amid remote schooling (even for those pursuing higher education), rising home prices, and limited stocks in areas preferred by many young consumers.