Home renovation is the process of improving and making additions to a home. This involves upgrading the interior which includes electricity and painting walls, exterior which includes upgrading roofing, masonry et cetera. Improvements can also be done on the property e.g. garden and outdoor structures such as garages. Renovations are done to a house to enhance comfort i.e. soundproofing some of the rooms like bedrooms, adding some items to the kitchen and luxurious seats to the living room. Renovations can be done for repair and maintenance, to create space, to save energy and for safety.
Renovation market data
The remodeling industry will continue to be steered by an economic approach and growing paychecks and growing equity in over the coming year. Mortgage rates have been predicted to increase not only in 2017 but through to the next years. High mortgage rates will slow down house sells therefore being a positive move for home remodeling as home owners will choose to renovate homes and make renovation investments. Home remodeling expenditures will elevate through the year.
Nationwide spending for home renovation has risen in 2017 to 6.7% (slightly lower than what was estimated in 2016), this being up to almost 317 billion US dollars. These figures are according to the Leading Indicator of Remodeling Activity (LIRA). The LIRA is responsible for future turning point identification on home remodeling. Spending by home owners on remodeling and repairs has been forecast to increase 2.0 percent per year after inflation adjustments are made. Entry of new millennials will boost the already thriving remodeling industry.
Those dominating the remodeling market are older home owners. However they are slower in getting into remodeling investment as the previous generations.
Currently they are interested in buying older homes with cheap prices and in need of renovations. Home owners over 55 years are expected to have their expenditure grow by 33 percent by the year 2025. National housing prices have been growing healthily over the years. This has helped those owners trying to rebuild home equity lost during housing crush. However increasing house prices may raise questions on the affordability of young buyers. It might also mean that such young buyers may not meet expenditure to renovate such homes in future. Percentage of young home owners aged 35 years and below dropped to 31 percent.
According to forecasts, the remodeling industry is set to grow tremendously over the next years despite of such challenges. There is a strong wave of rental housing demand due to shortage of affordable housing in most parts of the country. This has prompted buyers to buy older homes and invest in upgrading the homes. Also residential houses are remodeled by both homeowners and rental property owners. Their expenditure budget has surpassed the 2015 budget of 340 billion US dollars.
There are several opportunities for more growth in the remodeling industry. As this is witnessed, other niches like environmental sustainability, energy awareness and the need for healthy homes will also witness a significant growth.