Although much attention is paid to the greening of new houses, there are about 130 million existing dwellings in the U.S. and many of them desperately need energy upgrades.
“Half of all homes were built before 1973,” said Kermit Baker of the Joint Center for Housing Studies at Harvard University, during a Residential Summit session at the Greenbuild Conference in Phoenix last week.
“If you don’t deal with existing homes, you will not make a dent in energy consumption,” he told the building pros in attendance, noting that houses account for 20% to 25% of the nation’s energy usage.
Baker, who is a Joint Center senior research fellow and project director of the Remodeling Futures Program, provided these facts:
* The country is facing the worst housing downturn since World War II.
* The number of mortgage loan defaults has reached a record-high level.
* The decline in home prices has dramatically changed how homeowners view their houses: “There is a focus on function and less on aesthetics.”
* Volatility in energy costs persists.
Because of these factors, spending on home improvements is higher than new construction (60% versus 40%). He also noted “when systems need to be replaced, often homeowners spend on other projects.”
Although home improvement expenditures have fallen, the remodeling industry has turned the corner, Baker said. According to the Leading Indicator of Remodeling Activity released in October by the Remodeling Futures Program, annual spending levels should start to rise early next year causing year over year declines to shrink to 8.9% by the second quarter of 2010.
As the economy recovers, echo boomers—children of baby boomers, born between the late ’70s and late ’80s--will be entering the home-buying market in droves and will dominate sales in years to come, Baker said. Also known as Generation Y, these 20- to 30-somethings typically buy affordable, older dwellings and because many of them are environmentally conscious, they are apt to make energy improvements to these homes, said Baker, who also is chief economist for the American Institute of Architects (AIA).
Jean Dimeo is Chief Editor Online for EcoHome.