Chris Kirkham reported in Monday’s Wall Street Journal that, “Spending on single-family home construction remains 40% below the levels of a decade ago, but new forecasts project that U.S. investment in residential remodeling and repairs this year will surpass records set during the housing boom.
“Expense for repairs and remodeling is expected to surpass $300 billion this year, according to forecasts from John Burns Real Estate Consulting and the Harvard Joint Center for Housing Studies, ahead of the previous high of about $285 billion in 2007.”
Mr. Kirkham explained that, “Remodeling and home building both declined significantly in the years following the bust, but the fall was much less steep for home renovation. Experts said the unusual nature of this housing recovery—with very low inventories of homes for sale, often leading to price appreciation and bidding wars—has prompted many homeowners to stay put and improve the home they already have.”
The Journal article added that, “Brad Hunter, chief economist at HomeAdvisor, an online home improvement marketplace, said home renovation has bounced back better than new home construction because projects can be done bit-by-bit, in phases.
“‘Buying a house is a massive proposition for just about anybody: You have to jump through a lot of hoops and you have to have virtually spotless credit these days,’ said Mr. Hunter. Those who already own homes, on the other hand, have seen their equity improve in recent years.
“‘They’re able to get the loans they need to, and they’re able to dip into savings,’ he said.”
According to Monday’s Journal article: “Home improvement spending is expected to continue growing at a fast clip over the next three years.”
