As people begin to realize how much home equity they have built up, they are also becoming much more likely to put that equity to use in the form of home improvement projects. The historical average growth rate for home improvement and repair expenditures is 4.9 percent, but by the start of 2017 that rate is expected to reach 8 percent, according to Harvard’s Joint Center for Housing.
By mid-year 2017, the national remodeling market is expected to be almost completely recovered from the downturn, which was the worst on for remodeling on record, and annual spending will be closing in on $321 billion. After adjusting for inflation, this amount comes up just short of the previous high that was set back in 2006.
While people love to invest in their homes and attempt to increase the value by renovating a kitchen or bathroom, the thing that provides the biggest return is something you won’t even be able to see; insulation. As CNBC reports, not only is the average homeowner doing more renovations than before, they are also spending more per renovation.
Another factor increasing remodeling spending is the increase in homes being sold. With such tight inventory, it is unlikely most people are going to be able to find a home that checks all the boxes on their list. This means the first thing many people do after they move in, is fire up the remodeling engines and start inching closer to getting the house of their dreams.
