Americans spent so much on remodeling projects last year that it would appear remodeling had joined the ranks of America’s favorite pastimes. What could be fueling the increased spending?
Statistics show that Americans have spent nearly $130 billion on renovations in 2013 and may spend more in the coming months. Harvard University’s Joint Center for Housing Studies says there was a 6-percent jump in remodeling projects during the third quarter of the previous year.
Although still far from the 13-year high record of almost $150 billion in 2006, a year prior to the housing bubble, experts are bullish about the positive growth of remodeling in Chicago and all over the U.S.
Equity Up, Foreclosures Down
The Housing Scorecard for January 2014 recorded an impressive aggregate spike of $3.4-trillion for 2012 and 2013, while foreclosures went down last year by 33 percent from 2012. Rising property prices gave homeowners the confidence to invest in remodeling projects. From a ten-year low in 2010, home equity lending jumped to $123.4 billion in 2013.
Over the course of the stabilizing market, Chicago remodeling contractors have been responding to the renovation needs of a growing number of homeowners. With the increasing demand for remodeling professionals, homeowners should make sure they work only with qualified and experienced companies like DAL Builders to guarantee they get the best value for their money.
Not Enough Houses
Hudson also pointed out shrinking real estate inventory as a factor for increased remodeling activities. With less houses in the market, the value of existing ones has risen, making it easier for homeowners to get financing for renovation jobs.
Data from the National Association of Realtors reported that supply of new homes has dropped to just 4.6 months’ worth at the end of 2013. This contrasts to the rise in renovation spending, which would indicate that people are more satisfied in remodeling their existing homes than in buying a new one.
(Source: Americans Boost Spending on Remodeling, The Wall Street Journal, February 3, 2014)