Remodeling on the rise
It looks like 2018 is going to be a big year for the home remodeling market. According to the Joint Center for Housing Studies, home improvement projects will clock in around $340 billion across the country this year – a jump of 7.5 percent over 2017.
A record year
Harvard University’s Joint Center for Housing Studies recently released its annual Leading Indicator of Remodeling Activity. According to the report, it seems homeowners are gearing up for a lot of remodeling in 2018. In fact, home improvement, repair and remodeling spending is predicted to jump 7.5 percent this year.
Chris Herbert, managing director of the Joint Center for Housing Studies, said Hurricanes Harvey, Irma and Jose are part of the reason.
“Steady gains in the broader economy and in home sales and prices are supporting growing demand for home improvements,” Herbert said. “We expect the remodeling market will also get a boost this year from ongoing restoration efforts in many areas of the country impacted by last year’s record-setting natural disasters.”
It appears 2018 may even mark the biggest gain in remodeling spending in the last 10 years, according to Abbe Will, a research associate at the Joint Center.
“Despite continuing challenge of low for-sale housing inventories and contractor labor availability, 2018 could post the strongest gains for remodeling in more than a decade,” Will said. “Annual growth rates have not exceeded 6.8 percent since early 2007 before the Great Recession hit.”
Repairs, remodeling, refis?
With remodeling poised to increase, it begs the question: does that mean more HELOCs and cash-out refinances too?
Homeowners often use these mortgage products to leverage their home equity for cash. That cash can then be redirected toward home renovations, upgrades and repairs.
It’s a good year for it, too. A recent report from Black Knight Financial Services shows Americans have a whopping $5.4 million in home equity.
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