Drywall and Insulation Contractors NAICS 238310

Apr 10, 2025 - Median Home Age Rises

• The continued rise in the median age of US housing stocks may present opportunities for drywall and insulation contractors. In an April report, National Association of Home Builders analysis of US Census Bureau data showed that nearly half of owner-occupied homes were built before 1980. In 2023, the median age of owner-occupied homes reached 41 years, up from 31 years in 2005. Median home age has increased since the Great Recession when new housing production dropped dramatically. Since then, home building activity has not kept pace with demand. US homes require more maintenance and repairs as they age, driving remodeling spending. The lock-in effect of low mortgage rates during the pandemic is also prompting homeowners to renovate rather than move and face a higher interest rate.
• The total value of construction put in place increased 0.7% in February compared to January, according to the US Census Bureau. Spending on nonresidential projects rose 0.3% to a record $1.26 trillion. Residential spending grew 1.3%. Key areas of nonresidential building construction spending growth included amusement and recreation (up 1.3% in February over January) and commercial (+1.1); most other nonresidential building segments posted flat or negative growth. While public nonresidential spending was up 6.1% in February over the same month in 2024, private nonresidential spending has not kept pace, growing just 2.5% over the same period. In a press release, Associated Builders and Contractors Chief Economist Anirban Basu said, “The mix of high interest rates, tight lending standards, and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months.”

• North American construction and engineering spending in 2025 is expected to grow by 2% after increasing an estimated 6% in 2024, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. With growth of 19%, the data center sub-sector will lead 2025 nonresidential building construction, followed by public safety (9%), amusement and recreation (7%), and power (7%). Commercial construction spending is expected to decline 9% in 2025 amid a 6% decline in warehouse demand, which accounts for more than half of annual commercial spending. Lodging construction spending is forecast to drop by 7%, and stubbornly high office vacancies are expected to hold new office construction to 2% growth in 2025.
• Home remodeling spending is expected to see slight gains in 2025 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase by 0.4% to $513 billion in the first quarter of 2025 compared to Q1 2024. In the second quarter of 2025, remodeling spending will rise quarter-over-quarter to $505 billion, up 0.7% from Q2 2024. Spending will then increase to $506 billion in Q3 2025, up 1.2% from Q3 2024. In the fourth quarter of 2025, year-over-year spending is forecast to rise 1.2% to $509 billion. Joint Center expects improvements to be supported by rising home values, a steady labor market, and gradually improving existing home sales. Better retail sales of building materials and solid remodeling permitting activity should also support home improvement spending.