Home improvement investments poised to sustain through early 2017
Posted on Thursday, November 10, 2016 at 2:59:09 PM
Home improvement spending reached new heights in 2016, leading many economists and analysts to wonder how long investments will continue rising. Notably, there is more to home improvement financing than meets the eye, as it tends to be a somewhat major indicator of how consumers are feeling about the economy, their financial standings and more. Additionally, increased investments into improvements and upgrades can translate to higher home values, which acts as another vital component of the overall economy.
The housing market has seen its fair share of peaks and troughs throughout the past several years, but has certainly showed new signs of life in the past two years. This increased health and activity in residential real estate is one of the key reasons why home improvement has been such a major source of consumer spending, and a new report shows that the trend is likely to continue for a while.
At least another eight months
Harvard University's Joint Center for Housing Studies recently released its latest Leading Indicator of Remodeling Activity report, affirming that all signs point to continued growth in home improvement spending through the first two quarters of 2017. This sustained growth is set to have a positive impact on the economy by way of consumer spending, as well as home value increases and stability within the residential real estate industry.
"Homeowner remodeling activity continues to be encouraged by rising home values and tightening for-sale inventories in many markets across the country," Joint Center for Housing Studies Managing Director Chris Herbert explained. "Yet, a recent slowdown in the expansion of single family homebuilding and existing home sales could pull remodeling growth off its peak by the second half of 2017."
The second part of that quote is very telling, and very accurate - new housing starts have been slow, and no one truly knows when construction will pick back up. Regardless, though, the rise in remodeling, renovations and improvements is balancing out the market at large.
"Even as remodeling growth trends back down, levels of spending are expected to reach new highs by the third quarter of next year," Joint Center for Housing Studies Research Analyst Abbe Will added. "At $327 billion annually, the homeowner improvement and repair market will surpass its previous inflation-adjusted peak from 2006."
If you plan to make some improvements to your home in the near future, you should know about the financing options available.
Financially sound improvements
Especially when you are setting out to complete a major improvement or renovation, such as building a new bathroom, gutting and replacing a kitchen from the ground up, or otherwise, you might not want to put all of the cash down up front. Rather, this is an investment, and should be treated as such, meaning that financing programs should be reviewed.
Speak to your local community bank to understand the full range of home improvement programs available to you before finalizing your own plans to fund the projects.