Wall Street Journal writers Laura Kusisto and Sarah Chaney reported recently that, “A shortage of new single-family homes across the U.S. is pushing up prices and locking many buyers out of the market. The silver lining: a boom in renovations of existing homes.
“Americans are expected to pour a record $316 billion into home remodeling this year, up from $296 billion a year earlier, according to Harvard University’s Joint Center for Housing Studies.
“The burst of renovations has been a boon for contractors as well as big home-improvement companies, which have enjoyed strong revenue growth even as most other retailers are struggling.”
The Journal writers noted that, “It also reflects rising home prices and growing consumer confidence, as people are once again willing to invest in their homes, either through savings or by tapping home equity.”
Kusisto and Chaney added that, “But economists caution that the current boom is unlike earlier ones in that it is largely a reflection of a broken housing market. Many Americans are electing to stay put rather than trade up because the inventory of affordable homes is so small.
“In all, there are about as many homes for sale in the U.S. today as there were in 1994, but there are 63 million more people, according to Zillow Chief Economist Svenja Gudell. Ms. Gudell called the inventory shortage a crisis.”
