Americans are beginning to spend more on backyard decks, spa-like bathrooms and other vanity improvements.
Home remodeling and repair spending is anticipated to reach $325 billion this year, according to the Harvard Joint Center for Housing Studies. This level of spending hasn’t been seen since 2007. Marketing services company Hanley Wood offered a similar remodeling market outlook, projecting that the industry is to make a full recovery this summer following 12-straight quarters of growth.
“The forecast looks very bright for the remodeling market,” said Tobias Morrison, national sales manager for Hanley Wood.
The two big reasons for the recent surge in home improvement are rising sales of previously owned homes and rising prices, said Abbe Will, a research analyst at Harvard’s Joint Center.
According to Omaha World-Herald, Sales of existing homes rose 3.2 percent in June to the highest pace since February 2007. The level was 9.6 percent higher than a year ago and pushed the national median sales price to a record $236,400. The latest Standard & Poor’s/Case-Shiller national home-price index showed values have risen 28.4 percent since February 2012.
“Previous research has shown that a lot of remodeling happens around the time of sale, either before the sale or within a couple years after the sale,” Will said.
Sellers make improvements in hopes of getting a higher price, while recent buyers renovate what they don’t like in their new homes. “Home price is the other part of that because homeowners feel they can or should (renovate) their homes,” she said.
Across the country, homeowners are expanding rooms, rewiring and modernizing electrical circuits and adding new floors and fixtures.
