Home remodeling spending expected to increase in the near future
Posted on Monday, November 12, 2012 at 2:45:48 PM
Spending on home remodeling is expected to surge in the coming months, which could be another indicator that the housing market recovery is well underway.
Due to rising home sales and mortgage rates hovering near all-time lows, spending could increase significantly during the remainder of 2012 and through the first half of next year, according to a report from the Joint Center for Housing Studies at Harvard University.
"Strong growth in sales of existing homes and housing starts, coupled with historically low financing costs, have typically been associated with an upturn in home remodeling activity some months later," said Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "While the housing market has faced some unique challenges in recent years, this combination is expected to produce a favorable outlook for home improvement spending over the coming months."
Remodeling spending is projected to exceed $120.7 billion during the fourth quarter, the report said. Spending projections are even higher for next year, as the Center predicts $128.8 billion and $134.2 billion will be spent during the first and second quarters, respectively, of 2013. If the expected spending rate by the middle of 2013 proves to be true, this would mark a 16.6 percent increase from the previous quarter.
Projects not necessarily worth the investment
According to U.S. News and World Report, if you ever plan to sell your property, there are a handful of home improvement projects not worth the investment.
For example, homeowners who construct home offices often only make back half of what they put into it. In this day and age, with wireless internet and laptops, home-based workers may be better off settling down at a dining room table instead.
While bathroom remodels can recoup a significant amount of money on the investment, adding an additional bathroom is often an expensive task where the costs outweigh the benefits, says the news source. From this project, you can expect to recoup an estimated 60 percent on your investment, according to Remodeling magazine's most recent Cost vs. Value Report. Although this can make a property more comfortable, especially for a growing household, if you expect to sell your home in the near future, you may want to avoid this project.