The pace of single-family home construction is 40 percent below the levels of a decade ago. That's prompting more owners to work with what they have. Remodeling and repairs of existing homes is expected to surge this year. In fact, some studies predict that home improvement will surpass records reached during the housing boom, The Wall Street Journal reports.
John Burns Real Estate Consulting and the Harvard Joint Center for Housing Studies predict that expenses for remodeling and repairs will surpass $300 billion this year. That would beat out the $285 billion high from 2007. Home improvement spending is expected to continue its strong growth over the next three years.
“If you’re shopping for a home, the number of options out there are really low,” Todd Tomalak, a vice president at John Burns Real Estate Consulting who focuses on building products research, told The Wall Street Journal.
Also, some home owners are now discovering they have equity and are tapping into it for remodeling projects. They’re sprucing up now in the hopes that inventory levels will increase in the future and their remodels will then pay off when it does come time to sell.
Indeed, Brooke Port and her husband Tyler told The Wall Street Journal that they were looking to purchase a bigger home this year in the Denver area but with inventories so tight, they were struggling to find a home. They decided to tap into the equity of the home for improvements (their home’s value since 2013 has skyrocketed nearly 60 percent). The couple says they hope to eventually trade up when the market calms down.
Another factor driving more remodels: Homes are getting older. Homes built more than 30 years ago now comprise 65 percent of the housing stock nationwide -- up from 47 percent in 1995, according to data provided by the John Burns’ team.
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