Remodeling by Generational Composition of the Household

Analysis of data from the most recent release of the American Housing Survey indicates that households with two generations and those with three generations tended to remodel more than households with only one generation. Within two-generation households, however, those that include a generation older than the household head were less likely to remodel, but tended to spend the most when they did remodel.

A traditional source of data on remodeling in owner-occupied housing is the American Housing Survey (AHS, funded by HUD and conducted in odd-numbered years by the U.S. Census Bureau).  The latest (2015) iteration of the AHS included a new variable on number of generations in the household.

Based on NAHB tabulation of the 2015 data, the pie charts below show the distribution of home owners in these new AHS categories, as well as the distribution of those who remodeled.  As the figure shows, 58 percent of owner-occupied households are composed of only one generation such as one-person or married households.  Thirty-eight percent include the head of a household and one younger generation, typically a family with a child(ren) or young adults living with parents.  An additional 1.1 percent of owner-occupied households are composed of a householder and one older generation while 3.2 percent are made up of three or more generations.

The distribution of remodeling homeowners is fairly similar to the distribution of homeowners in general, but there are some minor differences.  One generation households and households that include one generation older than the household head accounted for slightly smaller proportions of remodeling households.  In contrast, households that include one generation younger than the household head and households with three or more generations accounted for somewhat larger proportions.

In other settings, the Census Bureau has labelled households with three or more generations multi-generational.   The relatively small 3.4 percent of remodeling households attributable to multi-generational households by this definition is consistent with last week’s post, which found that “to accommodate multi-generational living” was one of the less common reasons to remodel.

An alternative approach to the data is to measure the proportion of each household-type that engages in remodeling. The AHS captures remodeling over a two-year period, and this is divided by 2 in order to measure the one-year likelihood of remodeling shown below.

As the figure shows, 28 percent of one-generation households were likely to remodel over the course of a year.  The tendency to remodel was somewhat higher for most two-generation and three generation households.  Of the categories shown above, the one with the lowest tendency to remodel were households that included one generation older than the household head—which, as the previous figure has shown, account for only about one percent of all home-owning households.

As the next figure shows, one-generation households spent on average $10,010 on remodeling,* and two-generation households spent a similar amount.  Within two-generation households, however, those that include a generation older than the household head—the ones least likely to remodel—tended to spend the most when they did remodel.  Meanwhile, households composed of three or more generations, which had a higher likelihood of remodeling, tended to spend the least on their projects.

This link provides a table showing the total number of homeowners reporting remodeling projects and aggregate expenditures by generational household type.

* The total number of projects was also calculated from the AHS over a two-year period and then divided by 2. Total expenditures were calculated from the AHS over a two-year period and then multiplied by .513, the percent of retail sales of building materials over 2014 and 2015 that took place in 2015.



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