HomeAdvisor Survey: Strong Growth in Home Improvement Spending
Homeowners seeking to tackle home improvement projects appear undeterred by political and economic uncertainties and are spending nearly 60 percent more than a year ago on home improvement, reported HomeAdvisor.
The company’s 2017 True Cost Report said homeowners’ feelings about the presidential administration do not negatively impact homeowners’ willingness to take on home projects. While just 35 percent of homeowners are confident that their personal economic situation will improve as a result of policies enacted by the Trump administration, more than 80 percent of homeowners maintain they are planning to complete as many or more home projects in the next 12 months.
“Home improvement activity is showing resilience in the face of political shifts,” said HomeAdvisor’s Chief Economist Brad Hunter. “While there is a sharp divide in how homeowners feel about the economy and the current presidential administration, that divide is not affecting their willingness to take on home projects.”
Other report highlights:
–Homeowners are spending more on home improvement and planning for more. Homeowners tackled more home improvement projects from February 2016 through February 2017 than they did from February 2015 through February 2016. Nearly two-thirds of homeowners report plans to spend the same amount or more on home improvement projects in 2017 than they spent in 2016.
–Baby boomers and millennials are leading the charge. Baby boomers are doing more home projects–and spending more money–than any other group of homeowners, followed closely by millennials.
–Younger homeowners tend to DIY. Home project spending is up among millennials, but less than half report always hiring a professional to help complete home improvement projects, in part because they’d have to save for or finance a home improvement and in part because they’re uncertain they’re being charged a fair price.
–Home improvement is gaining the most traction in the West and Northeast. Homeowners in the West and Northeast are spending the most on home improvement. And, because they’re accruing some of the highest equity, they’re also taking out the most home equity loans to complete projects.
Last week, the Joint Center for Housing Studies at Harvard University, Cambridge, Mass., said strong gains in home remodeling and repair activity are expected to ease moving into next year. The Joint Center Leading Indicator of Remodeling Activity projected annual growth in home improvement and repair expenditure this year will remain above its long-term trend of 5 percent, but will decline steadily from 7.3 percent in the first quarter to 6.1 percent by first quarter 2018.
“Homeowners are continuing to spend more on improvements as house prices strengthen in most parts of the country,” said Chris Herbert, Managing Director of the Joint Center. “Yet, recent slowdowns in home sales activity and remodeling permitting suggests improvement spending gains will lose some steam over the course of the year.”
“The remodeling market is approaching a cyclical slowdown after several years of steady recovery,” said Abbe Will, Research Analyst in the Remodeling Futures Program at the Joint Center. “While the rate of growth is starting to trend down, national remodeling expenditures by homeowners are projected to reach almost $320 billion by early next year.”
Home Advisor’s Hunter noted, however, with the advent of millennials buying homes, including some fixer-uppers, and baby boomers well-established in their homes, there are more people in a homeownership position than there were in the past two years.
“These trends, along with rising home values and increased homeowner equity, are fueling home improvement spending,” Hunter said. He said the forecast calls for continuing strong growth in large and discretionary improvement projects, including an increasing number of bathroom, kitchen and garage remodels.
The HomeAdvisor report can be found at http://www.homeadvisor.com/r/true-cost-report/#.WQDDc2nyupo.
