Home Remodeling to Be on Rise Through the End of 2018November 20, 2017
Americans are spending more money on home renovations and experts predict that the rate of this spending will continue to increase through the end of 2018. A new report released in October by the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University predicts that annual gains in home renovation and repair spending will increase from 6.3% in the last quarter of this year to 7.7% by the third quarter of 2018.
The Joint Center’s Leading Indicator of Remodeling Activity or LIRA is a quarterly report that gives a short-term outlook of national home improvement and repair spending to owner-occupied homes.
What’s Driving the Increased Spending?
According to Chris Herbert, the managing director of the Joint Center, the increased spending in home improvements is due to several factors. These include:
- A strengthening economy
- Tight inventories of homes on the market
- Home equity gains
“Over the coming year, owners are projected to spend in excess of $330 billion on home upgrades and replacements, as well as routine maintenance,” he said.
The potential for growth is even more significant in some regions when considering the effects that recent hurricanes and natural disasters will have on the remodeling industry, said another research associate at the Joint Center. It is too early for the impact of these to be accurately gauged by LIRA yet, they explained.
Where Are Remodeling Dollars Being Spent?
While LIRA doesn’t provide data on specific home projects, the annual survey by home remodeling and design platform Houzz gives some insight into where homeowners are spending their remodeling dollars and their reasons for remodeling.
Kitchens, bathrooms and living rooms were the main rooms being remodeled by repeat homeowners (those who are not first time homebuyers). The top reason these homeowners were remodeling was to improve the design of their homes, followed by the second most popular reason, which was to improve functionality. More than half of first-time homeowners, on the other hand, said their main reason for remodeling was to address health concerns in their homes.
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