The American Home Got Larger During Economic Boom Times, But Needs A Face-Lift During The Recession

The American population is spread among the 130.1 million homes and housing units across the country, according to the U.S. Census Bureau. Nearly half of Americans’ homes were built between 1950 and 1979, with 1974 the median year in which homes were built.

Nearly 8.8 million homes (or 6.7%) are manufactured or mobile homes; 8.7 million (6.7%) are condominiums; and 800,000 (0.6%) are cooperatives. Some 7.8 million (6.0%) are extra residences, with most of those (52%) used as recreational properties.

The median size of American homes is 1,800 square feet. That is the same median size as owner-occupied units (1,800 square feet), whereas renter-occupied units have a median size of 1,300. Among homes constructed in the prior four years, the median size is 2,300 square feet, 28% larger than average. While recently-built homes are larger, they are built on smaller-than-average lots (0.27 acres vs. 0.32 acres on average).

Not surprisingly, owner-occupied homes include more amenities than renter-occupied homes, including:

Porch, deck, patio, or balcony (92% of owner-occupied homes vs. 71% of renter-occupied homes);

Garage or carport (80% vs. 37%);

Separate dining room (57% vs. 28%);

Usable fireplace (45% vs. 12%); and

Two or more living rooms or recreation rooms (41% vs. 8%).

Remodeling

The proportion of homeowners who are planning a remodeling project is rebounding in 2010, according to the National Association of Home Builders. Its Remodeling Market Index, which had dipped to a low of 22.1 in the fourth quarter of 2008, has risen to 40.7 in the second quarter of 2010. The index measures demand for residential remodeling projects, and a number below 50 indicates that more remodeling contractors believe that demand is declining than believe it is increasing.

The index corroborates RemodelOrMove.com’s findings of a 13% increase in homeowners who are planning a remodeling project in 2010. That is on the heels of a 5% increase in 2009. In addition, 54% of those planning a remodeling project are excited about doing it, up from 48% in 2008. Adding a bathroom has supplanted remodeling a kitchen or bathroom as the most popular project in 2010 (see chart).

The proportion of homeowners who plan to hire a general contractor has remained relatively steady, with 64% planning to do so in 2010, down from 66% in 2008. Two thirds (66%) plan to do some of the work themselves, compared to 67% in 2009. Although the cost to remodel is down as much as 20% compared to 2006, an increasing number of those planning to remodel are planning to seek out cheaper materials for their projects; at the same time, the number reporting they will use “luxury” materials is on the decline.

When shopping at big box retailers, homeowners perceive Home Depot as better for “professional” products (such as paint, building materials, and power tools), whereas they perceive Lowe’s as better for decorative categories (such as appliances, lighting, landscape, and hard flooring and carpeting), according to Kantar Retail. Although it is a low proportion of shoppers who visit home improvement stores for project ideas, their perceptions of the stores may explain why twice as many Lowe’s shoppers (4%) as Home Depot shoppers (2%) came to the store to get ideas for an upcoming project.

Lowe’s shoppers (35%) are also more likely than Home Depot shoppers (30%) to visit the store to buy products for a home improvement project. By comparison, Home Depot shoppers (32%) are more likely than Lowe’s (27%) to visit the store to buy home maintenance products.

Sources: “2009 American Housing Survey,” U.S. Census Bureau, Public Information Office, 400 Silver Hill Rd., Washington, DC 20233; 301-763-3030; pio@census.gov; www.census.gov. Price: Available online at no charge.

“Remodeling Market Index,” National Association of Home Builders, David Crowe, Chief Economist, 1201 15th St., NW, Washington, DC  20005; 202-266-8200; www.nahb.org/rmi/. Price: Available online at no charge.

“U.S. Remodeling Sentiment Report,” RemodelOrMove.com, Dan Fritschen, Principle Researcher, 1030 E. El Camino Real, #150, Sunnyvale, CA 94087; info@remodelormove.com; www.remodelormove.com. Price: Available upon request at no charge.

“Home Improvement Series,” Kantar Retail, Katherine Clarke, VP Marketing, Two Easton Oval, #500, Columbus, OH 43219;  614-355-4009; katherine.clarke@kantarretail.com; www.kantarretail.com. Price: Call for information.

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