Remodeling and ADUs on the rise
It seems Americans are taking the country’s housing woes into their own hands. With construction down and inventory still low, new data shows homeowners are investing more in remodeling and building accessory dwelling units to make up for it.Verify your new rate (Jul 5th, 2020)
Investing at home
According to the October Housing Health Report from BuildFax, new construction leaves something to be desired, but investment in existing housing stock is high. Remodeling spend has jumped 4.21 percent over the last year, and spending on home maintenance has increased as well.
According to BuildFax CEO Holly Tachovsky, rising mortgage rates and lagging income growth are behind much of this trend.
“Home prices are outpacing wage growth substantially,” Tachovsky said. “These affordability concerns are compounded by mounting mortgage rates and rising construction costs. As a result, homeowners, unable to re-enter the housing market, are reinvesting in their existing properties. The increase in remodel spend suggests the scope of these projects has risen, despite seeing a dip in remodel volume. Homeowners may feel unprepared to enter the housing market, but they are making larger investments in the health of their existing property.”
Minnesota has seen the highest amount of home maintenance activity over the last year, while Missouri has experienced the biggest growth in this area. Missouri homeowners have spent 14.86 percent more on home maintenance than last year.
ADUs up — especially on the West Coast
Homeowners are also spending cash on building accessory dwelling units — sometimes called granny flats — which they then rent out on Airbnb, to tenants or use for housing friends and family members.Verify your new rate (Jul 5th, 2020)
ADUs are particularly popular in places with fast-growing populations and high-cost housing markets, like Oregon, Washington and California. Permits for ADU construction have jumped 53.7 percent since the start of 2018.
ADU permits are up 25.9 percent year-to-date, while Washington’s are close behind at 21.99 percent. California has had the highest volume of ADU permitting since 2016.
Get today’s mortgage rates
Looking to invest in a remodeling or home maintenance project? Then shop around and see what refinance rates you qualify for today.Verify your new rate (Jul 5th, 2020)