You may think housing prices are hot, and you are correct. But check out what's been going on in the U.S. home remodeling market: It is booming like never in history.

A new study released last Thursday by a team of researchers from Harvard University estimated that last year's expenditures on home improvements hit an all-time record of nearly one-quarter trillion dollars -- $233 billion. Home renovations now represent 2 percent of all expenditures in the U.S. economy.

Baby boomer homeowners account for half of that spending, but Gen-X'ers are quickly catching up. Their expenditures jumped five-fold between 1995-2003 to $28 billion. Perhaps the most dramatic shift in the remodeling market, according to Harvard researchers, has been the move to high-end, high-cost renovations of kitchens, bathrooms and major room additions among affluent households:

• Owners of high-priced homes, and households with $120,000-plus annual incomes, accounted for 90 percent of the growth in remodeling spending between 1995-2003. Though such households represent just 11 percent of the total owner-occupied housing stock, they accounted for nearly one-third of all home improvement spending in 2002-2003.

• Households spending at least $10,000 on remodeling projects generated over half of all 2003 home improvement outlays, while households spending $25,000 or more accounted for one third -- essentially double their share in 1995, adjusted for inflation.

Millions of minority and foreign-born homeowners are also making their mark in U.S. remodeling. Minority homeowners now account for nearly 15 percent of total expenditures, while foreign-born owners spent $10 billion in 2003 -- a big spurt upward that reflects their rapidly-growing presence in the ownership market as a whole.

Harvard researchers found that the heaviest home improvement expenditures continue to be in the Northeastern and Midwestern states, but the fastest-growing remodeling markets are in the Sunbelt and on the West Coast. For example, Miami, San Diego, Los Angeles, San Francisco, Portland and Tampa all registered remodeling growth rates in excess of most Northeast metropolitan areas except Washington, DC.

What are homeowners spending their remodeling dollars on, irrespective of geographic location? Tops on the list:

• Improvements and expansions of interior spaces -- especially kitchen renovations, bathroom and spa projects, additions of new rooms or whole sections of houses -- represent 45 percent of all remodeling expenditures by homeowners.

• Replacements to exteriors and interiors -- roofing, siding, windows and doors, plus flooring, walls, and ceilings -- account for another 28 percent.

• Replacing or upgrading systems and equipment -- especially built-in appliances and electrical heavy-ups -- represent 11 percent of expenditures.

• "General improvements" to homes such as driveways and retaining walls make up the remaining 18 percent.

(You can view the full Harvard report by clicking here.)