Homeowners who decide to undergo a home improvement project, whether it be interior or exterior modifications, often find that the task was worth the investment and time, according to a new report from the National Association of Realtors, with insights from the National Association of the Remodeling Industry.
As many families prepare to ramp up their time spent outside, it can be helpful to keep the latest trends in mind while planning for outdoor living spaces. According to research from the International Casual Furnishings Association, many people use outdoor rooms for things they can do indoors – from using cellphones for calls and games to working on computers, watching TV, eating, exercising and, of course, relaxing.
With home sales beginning to pick up again, are consumers pulling back on their home remodeling plans? Leading Indicator of Remodeling Activity (LIRA) data recently released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University suggests that spending will stay high through the end of the year. After that, consumers may reduce these expenditures.
A strengthening in the housing market over the past 18 months is translating into increased spending on home improvements, and remodeling is expected to continue growing for the foreseeable future. The four-quarter moving rate of change for remodeling activity measured 4.5% in the first quarter of 2013, according to the U.S. Census Bureau, and is expected to rise into the high teens in the near future.
Homeowners across the U.S. seem to be reaching the same conclusion. It might be a long time before the real estate market improves. As a result, they are now spending more money improving homes than at any time since 2004.
Slowly but surely, the U.S. home improvement industry is emerging from its worst downturn since the government began tracking spending in the early 1960s. Homeowners who deferred maintenance and improvements during the recession may soon start to spend more freely. Lower household mobility in the wake of the housing market crash could also mean that homeowners will focus on upgrades with longer paybacks, particularly energy-efficient retrofits. Over the coming years, real spending on homeowner improvements is expected to grow at a 3.5% average annual pace. Income and house prices are key determinants of improvement expenditures per homeowner, and high-income households and highpriced homes are typically located in large metros.
Before the real estate crash, homeowners were busily remodeling and flipping houses, confident that even the most lavish improvement would provide a return on investment. But since the start of the recession, the rate of remodeling has slowed significantly. These days, consumers are cautiously approaching improvements to their homes. And they are playing close attention to which of these improvements will pay off as home prices are still dropping in many markets.
During the recession, home sales slowed significantly. At the same time, homeowners put the brakes on remodeling expenditures. High-end kitchen and bathroom remodeling went out of style, especially since homeowners were afraid they wouldn’t recoup any of their investment in the stalled housing market. Expenditures that did take place during the recessing were largely related to replacement of worn out items or energy efficiency improvements.