To help illustrate some characteristics of consumers expenditures on home improvements, we took a closer look at the Joint Center for Housing Studies’ tabulations of the 2011 American Homeowner Survey, paying particular attention to expenditures based on household income.
First, it should be noted that there are about 75 million owner-occupied units in the US. Here is the breakdown of these units according to household income:
Next, we filtered homeowners who reported improvement projects that involved a professional (as opposed to DIY). Here is the tabulation of homeowners within each income bracket who reported a project in 2011:
Homeowners with an income of $120,000 and up were 50% more likely to report a project involving a professional than homeowners with an income below $40,000. What’s more, the average expenditure for the highest income bracket was nearly 3x that of the lowest income bracket.
This all adds up to a market in which the 17% of homeowners who fall within the highest income bracket, account for 37% of the total expenditures within the market; the 34% of homeowners within the lowest income bracket account for 18% of the total expenditures.
The JCHS tabulations can help us understand something about the $176 billion spent on improvement expenditures (in owner occupied units) but not the $49 billion spent on maintenance. For that, we looked directly at the AHS data, which breaks down homeowners according to how much they spent on home maintenance in the year:
The AHS doesn’t provide an income-based breakdown for routine maintenance expenditures however using the median value for each bin, we can roughly estimate that the 6.5% of homeowners who spent more than $2,400 on home maintenance, were responsible for approximately 24% of the total home maintenance expenditures in the year.
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