Home Improvement Spending in 2013: What $150 Billion in Remodeling Tells Home Builders About Market Trends

In 2013, American homeowners spent an estimated $150 billion on home improvements and repairs, according to the National Association of Home Builders (NAHB). That figure, while enormous, actually represented a decline from the peak remodeling years of the mid-2000s, when home equity-fueled renovations pushed spending well above $160 billion annually. Understanding what drove this spending, where the money went, and how the market has evolved since then offers valuable lessons for home builders navigating today’s housing cycle. For builders looking to tap into the remodeling and renovation market, the 2013 data provides a baseline for understanding homeowner priorities during a period of gradual market recovery.

The $150 Billion Home Improvement Market: Breaking Down the Numbers

The NAHB report on 2013 home improvement spending revealed a market that was substantial but still finding its footing after the housing crash. The $150 billion total encompassed everything from minor repairs to major remodels, covering both owner-occupied homes and rental properties.

Comparing 2013 to Previous Years

To understand the significance of the 2013 figure, it helps to look at the trajectory of home improvement spending in the years before and after the housing crisis:

The data shows that 2013 spending, while $18 billion below the 2006 peak, represented a steady recovery from the 2009 trough. Homeowners were slowly regaining confidence in their property values and were willing to invest in improvements, but not at the speculative level seen during the boom years.

Categories of Spending in 2013

The NAHB categorized home improvement spending into several key buckets. The distribution reveals what homeowners prioritized during this recovery period:

1. Exterior replacements (roofing, siding, windows, doors) — approximately 28% of total spending. These are often necessity-driven projects that cannot be deferred indefinitely.
2. Kitchen and bath remodels — approximately 22% of spending. These remain the highest-ROI interior projects and were a priority for homeowners preparing to sell or simply improving their living space.
3. Interior room additions and finishing (basements, attics, room additions) — approximately 18% of spending. Adding livable square footage continued to be popular even in a modest market.
4. Systems and infrastructure (HVAC, plumbing, electrical) — approximately 15% of spending. Aging systems in existing homes drove much of this category.
5. Landscaping and outdoor structures — approximately 10% of spending. Decks, patios, and landscaping remained priorities for homeowners extending their living space outdoors.
6. Other improvements (interior upgrades, painting, flooring) — approximately 7% of spending.

What Drove Home Improvement Spending in 2013

Several economic and social factors converged in 2013 to shape how homeowners approached improvement projects. Understanding these drivers helps builders anticipate future remodeling trends.

Recovering Home Values and Equity

By 2013, home prices in many markets had stabilized and begun to rise after the crash. The S&P/Case-Shiller index showed national home prices increasing roughly 10% from 2012 to 2013. This recovery in home values restored some of the home equity that had been wiped out during the downturn, giving homeowners both the confidence and the financial capacity to invest in improvements. However, with lending standards still tight, most homeowners funded projects through savings rather than home equity loans.

Aging Housing Stock and Deferred Maintenance

A significant portion of the 2013 spending went toward addressing years of deferred maintenance. During the recession years of 2008 to 2010, many homeowners postponed major repairs and replacements. By 2013, systems were reaching the end of their service life:

• Roofing systems installed in the late 1990s and early 2000s needed replacement after 15-20 years of service.
• HVAC systems that were pushed past their expected lifespan began failing, driving replacement spending.
• Windows and siding on homes built during the peak building years of 2002-2006 were showing signs of wear.
• Plumbing and electrical systems in older homes required upgrades to meet modern code requirements.

This catch-up effect created a floor under improvement spending that helped sustain the market even as discretionary project spending remained cautious.

The Stay-in-Place Mentality

With many homeowners still underwater on their mortgages or unable to sell without taking a loss, the decision to improve rather than move became a major driver of spending. Rather than trading up to a new home, homeowners chose to make their existing homes work better for their changing needs. This trend of “improve in place” boosted spending on interior remodels, room conversions, and home upgrades that created a more welcoming living space without the cost and hassle of moving.

Key Remodeling Projects That Captured Consumer Investment

The $150 billion in 2013 spending was not evenly distributed. Certain project types captured a disproportionately large share of homeowner investment, and these categories offer insight into what drives consumer behavior in a recovering market.

Bathroom Remodels: The Steady Performer

Bathroom remodeling has historically been one of the most consistent categories of home improvement spending, and 2013 was no exception. Homeowners invested in both full gut renovations and partial updates, with the strategic bathroom remodeling approach focusing on tile, waterproofing, and design proving especially popular. Key trends included:

• Master bathroom expansions that incorporated spa-like features such as larger showers, soaking tubs, and dual vanities.
• Accessibility upgrades that allowed homeowners to age in place, including curbless showers and grab bars.
• Water efficiency improvements through low-flow fixtures and WaterSense-certified products.
• Tile upgrades that replaced dated materials with porcelain, natural stone, and large-format tiles.

Kitchen Remodels: The High-ROI Investment

Kitchen remodels continued to command the highest spending of any single room, with midrange major remodels averaging around $55,000 and upscale projects exceeding $100,000. In 2013, kitchen projects emphasized:

1. Cabinet refacing and replacement — the single largest line item in most kitchen remodels, accounting for roughly 30% of total project cost.
2. Countertop upgrades — granite remained the dominant material, but quartz (engineered stone) was rapidly gaining market share for its durability and low maintenance.
3. Appliance replacement — Energy Star-rated appliances were becoming standard as homeowners prioritized efficiency alongside aesthetics.
4. Flooring and backsplash — hardwood and luxury vinyl tile were popular flooring choices, while subway tile backsplashes remained a timeless favorite.

Exterior Replacements and Energy Upgrades

Exterior projects dominated the 2013 spending data. Roofing alone accounted for a significant portion of the total, driven largely by necessity rather than choice. Energy efficiency was a growing factor in homeowner decision-making:

• Window replacements focused on double-pane, low-E glass and improved insulation values.
• Siding upgrades moved toward fiber cement and engineered wood products that offered better durability and lower maintenance than traditional wood.
• Door replacements emphasized energy efficiency and security, with steel and fiberglass doors gaining preference over wood.

Basement and Attic Conversions

Adding finished living space without expanding the home’s footprint was a popular strategy in 2013. Basement finishing projects converted unused space into home theaters, guest suites, and home offices. Attic conversions added bedrooms and bonus rooms. These projects offered strong return on investment at a lower cost per square foot than traditional additions.

What Home Builders Can Learn from the 2013 Remodeling Market

The $150 billion in home improvement spending recorded in 2013 is more than just a historical data point. For today’s home builders, understanding the dynamics of that market offers actionable insights for navigating current and future housing cycles.

The Remodeling Market as a Leading Indicator

Home improvement spending often leads the new construction market by 12 to 18 months. When homeowners begin investing in improvements, it signals growing confidence in property values and household finances. Builders who track remodeling spending data can gain early warning of market shifts. The 2013 data showed a market that was recovering steadily but still well below its potential, foreshadowing the stronger new-home market that would emerge in 2014 and 2015.

Opportunities in the Aging Housing Stock

With the median age of owner-occupied homes in the United States continuing to rise, the replacement and renovation market represents a growing opportunity for builders. Homes built during the peak construction years of the 1990s and early 2000s are now reaching the age where major systems need replacement. Builders who position themselves to capture remodeling work or who design new homes with future adaptability in mind will be better positioned to ride the next wave of improvement spending.

Understanding why consumer spending matters more than ever for home builders helps put the 2013 data in perspective. The relationship between homeowner confidence, property values, and improvement spending is a cycle that builders can monitor and respond to with targeted marketing and product offerings.

Designing Homes for the Improve-in-Place Trend

One of the most important lessons from the 2013 spending data is that homeowners will invest in their homes when they cannot or choose not to move. Builders who design homes with flexibility, expandability, and aging-in-place features built in from the start create properties that remain attractive to buyers across multiple market cycles. Key design features that support long-term livability include:

• Main-floor master suites that allow homeowners to age in place without moving.
• Flexible bonus rooms that can serve as home offices, guest rooms, or hobby spaces as needs change.
• Structural provisions for future additions, such as planned roof slopes and foundation layouts that accommodate expansion.
• Plumbing rough-ins for future bathroom additions in basements or bonus rooms.

Building Trust Through Quality Workmanship

The 2013 data also underscores the importance of quality in driving homeowner satisfaction. Many of the projects funded that year were responses to failed systems or aging materials that had been deferred during the recession. Homeowners who experienced premature failures in roofing, windows, or mechanical systems became more discerning about product selection and installation quality. Builders who prioritize durable materials and quality construction create homes that hold their value longer and generate fewer warranty claims. Building customer loyalty through exceptional service in home construction becomes especially important when homeowners have the option to improve rather than move.

Practical Takeaways for Builders

1. Track local remodeling permits as a leading indicator of market confidence in your area. Rising permit values for additions and major remodels often precede increased demand for new homes.
2. Consider adding a remodeling division or partnering with local remodelers to capture the improvement market during downturns in new construction.
3. Specify durable, low-maintenance products that appeal to homeowners who plan to stay in their homes long-term. The improve-in-place trend rewards quality over initial cost.
4. Market your home’s adaptability. Buyers want to know that their home can evolve with their needs through future improvements.
5. Monitor the NAHB remodeling market index for early signals about homeowner sentiment and spending intentions.

The $150 billion that Americans spent on home improvements in 2013 tells a story of a market in transition. Homeowners were emerging from the trauma of the housing crash, cautiously reinvesting in their properties, and prioritizing improvements that added real value to their daily lives. For builders who understand these dynamics, the remodeling market represents not a competitor to new construction but a complementary force that reveals where the housing market is headed next. By studying the patterns of improvement spending, builders can make smarter decisions about product design, market positioning, and long-term business strategy in any housing cycle.