From Cars to Housing: A Familiar Industry Shift Reemerges

A similar shift to what struck the auto industry 30 years ago appears to be playing out in housing spending today. As a result, the path of industry growth is behaving differently than earlier cycles, and industry leaders should pay attention.

About 35 years ago, the automotive industry underwent a shift which drove changes in industry focus and cyclicality. What happened? Cars began lasting longer. Vehicle lifespans lengthened from roughly five to seven years to seven to 10 years, and then 10-plus years, fundamentally altering how industry demand responded to changes in interest rates, consumer sentiment, oil prices, and other factors. As replacement cycles lengthened, the nature of consumer demand shifted, resulting in more episodic surges of spending, and greater reliance on pricing and mix, including higher-end vehicles.* It seems something similar may be playing out in housing in 2026.

Longer Cycles in Housing Spending

Similar to auto three decades ago, the typical American household has stretched out periods between purchases, and associated periods of spending around the home.

Census data reveals the typical American household stays in their home about six years longer between moves today versus 20 years ago.** Half of this shift is driven by demographics—older homeowners move less often—but moving less often is also a social phenomenon. Longer periods between moves is a behavioral shift, with renters sticking around about three years longer in their homes than they did 20 years ago, and homeowners staying put nearly 11 years longer.

All age groups move less often today versus 30 years ago. Younger households, under 25 years old, stay at least a half year longer than their peers did, with recent shifts reflecting more than just ‘lock-in’ effect. Between 2015 to 2021—pre-rate hike—the average renter shifted their behavior by staying put 2.1 years longer versus 2015 levels, which grew to 3.2 years by 2023.

This shift goes deeper than just moves. Physically, innovations in materials used in the home have shifted to drive longer purchase cycles too. A few examples include:

Incandescent light bulbs (two-year lifecycle) shifted to LED light fixtures (roughly 12-year cycle)
Carpet (eight-year cycle) to LVP/LVT floors (15-year cycle)
Longer-lived roofing materials (about seven years longer)
Shift from wood to composite decking (some decks last 25 to 50 years)
And many more products (interiors, windows, etc.)

As a result, the replacement cycle for typical home components are about roughly two years longer (including appliances, etc.), major remodels are even longer (11-plus years).

The net effect of this shift matters for several reasons:

1. Zonda estimates a -$25B ‘timing deferral’ shift in home improvement spend in 2026, on the back of deferral already occurred earlier. Deferred dollars are not ‘lost,’ but moved to a future time.

2. More cyclicality, easier to defer, with shift in timing for underlying demand. This results in more ‘boom/bust’ dynamic, with greater credit sensitivity versus earlier cycles. Zonda estimates that the shift in physical materials pre-COVID exacerbated the boom/bust nature of subsequent spend on the housing during 2021 and 2022 by 1.2 to 1.8 times faster versus what might have occurred in earlier periods under the same conditions. Fast forward to 2025 and 2026, to the softening in home improvement/housing spending, which some worry are ‘permanent’ are most likely reflections of the shift to longer replacement cycles, not stagnant demand.

3. Greater ‘clustering’ of demand, people defer moves or improvements on many parts of the home—versus only a few before—and then tackle the entire basket of home improvements as part of one large project when times are good. Record uncertainty today gives way to large lumpy project expenditures ahead as deferred activity is activated. One hypothesis is the growing wave of HELOC extraction underway becomes the eventual catalyst for these ‘lumpy deferred improvement’ projects once consumers feel more steady.

4. There is an argument that more volatility equals greater market share capture among most sophisticated channels. The companies with the best purchasing/data analysis tend to be price leaders earliest in a downturn, and maintain product availability amid supply shocks (e.g. Home Depot gained share after COVID because of being the only company with products availability amid a shortage). Time will tell, but sophistication and scale really matter when large swing in supply versus demand occur, which are likely to be exacerbated by changes in how frequently the industry purchases.

5. Capital structure: The industry historically gauged risk of suppliers by comparing exposure mix of new construction (cyclical) versus remodel exposure (less cyclical). But deferral shifts add another layer: Two companies with similar levels of new versus remodel exposure, but happen to sell into categories facing different amounts of deferral will now have meaningfully different cyclical risk, such as windows/doors versus appliances. As a result, the profitability of suppliers will look surprisingly different compared to earlier norms.

In autos, longer replacement cycles drove a shift from ‘new auto sales’ toward ‘monetizing services’ like maintenance, software, and data. Housing may be moving in the same direction. Increased spending toward recurring services attached to the home, such as HOA fees, amenities, maintenance, and rental-linked services. Longer cycles encourage ‘renting’ functionality around housing services, not just transacting the home itself. Perhaps that is the signal we should note for housing.

What an important time to be in housing, remodeling, or building products.

*Many economics papers would be written on how to understand the broader phenomenon occurring in longer-lived durables. Ben Bernanke touched the idea of changes in durable good cycles in the early 1980s, with subsequent research focusing on auto due to nature of the data. Now this seems to be playing out in housing.

**Statistically, the average period between moves for the entire population (movers and non-movers) is the inverse of the mobility rate. For example, a mobility rate of 10% would imply that a typical household is expected to move every 10 years (1/0.10 = 10 years). Mobility rates have declined for the past 40 years, driven by a combination of demographic and behavioral factors for all age groups, including owners and renters.

***Implication from shift to longer replacement cycles also means the -$25B headwind due to deferral flips to a ‘tailwind’ whenever the market turns positive. That’s roughly equal to an extra year worth of HELOC activity plus income growth. When the industry stabilizes growth could feel surprising, similar to 1980s, when mobility deferrals occurred.

Read the first and second iterations of this six-part series below. The insights in this article were taken from a more detailed review in Zonda’s Building Products Outlook.