With Mortgage Rates Rising, More Homeowners Are Opting to Remodel
After several years of booming sales and soaring prices, the U.S. housing industry is starting to cool down. But one residential sector is bucking the trend. Home remodeling is expected to grow over the next two years as more of the nation's homeowners elect to fix up rather than sell off the roofs over their heads.
Residential remodelers spent more than $300 billion nationwide in 2018. And industry forecasts call for an increase in home redos and repairs this year. Housing economists are predicting a 4 percent to 5 percent increase in home remodeling this year, while nationwide preowned home sales are expected to drop about 3 percent. "As houses get older and affordability becomes an issue, remodeling the existing house is a more reasonable option," said Danushka Nanayakkara, a top forecaster and analyst for the National Association of Home Builders. She said that almost 40 percent of U.S. homes are 48 years old or older.
Traditionally, most home remodeling work is done to improve a home before a sale or to upgrade one after it's purchased. But with homeowners staying put longer, more of the remodeling jobs are by owners who want to step up the quality of their house. "If you have equity in your home, because there are so few homes for sale and the cost of building has skyrocketed, a lot of the times it makes more sense to remodel the home you are in," said Joanne Theunissen, a top officer in the homebuilding industry's remodeling council. "We are seeing a lot more whole-house remodels and large additions to homes...
