Top 10 Reasons Why Home Remodeling is Booming

February 21, 2011 / by / In

The housing market boom of the late 90’s and early 2000’s has completely flat lined. People are no longer able to qualify for a new home loan easily and their finances have most likely tightened during their daily lives. Instead of searching for new homes to buy in better neighborhoods, they are accepting that they will be living in their current home for many years to come. The mentality has changed from new home buying to improving the home you already live in. The home remodeling industry is making a strong comeback and there are several factors that help explain the recent and future remodeling boom. Major Home Remodel

  1. Stabilizing economy: The economy may not be making a full rebound, but it seems to be stabilizing and should remain somewhat constant through the next several years. People will regain trust in the economy and feel more comfortable spending money on larger projects such as home remodels.
  2. Stable housing market: The major downward swing in the housing market and drastic increase in foreclosures over the past few years is now stabilizing. With fewer people losing their homes (thankfully) and more people purchasing affordable housing, there will be a larger market available for home remodels.
  3. Age of houses: In higher income metro areas, the housing stock is older and the people living in them have the necessary income to make improvements. The higher value homes in high income metro areas will regain value faster than low income areas and provide the main area of growth for the home remodeling industry.
  4. Increased spending: Since the economy seems to be stabilizing and people are showing new confidence in it by spending rather than saving more, they will now use their discretionary income to spend on improving their living conditions.
  5. Job security: During the lowest point of the recession, many people were worried for their own job security. With a more stable economy, less people will be afraid of losing their jobs and will once again feel more comfortable spending money on housing projects. Without the fear of job loss looming over people’s heads, they can begin spending money on other things that will make their life more comfortable.
  6. Necessary upgrades: Over the past several years people have been neglecting the home upgrades that are necessary for a comfortable level of living. The next several years in the home remodeling industry will have a large focus on the necessary upgrades that were neglected in the past.
  7. Baby Boomer retirement: The Baby Boomer generation is beginning to retire and either find a home to spend the rest of their time at or improve upon their own. They will prepare for retirement and aging by spending money on upgrades to make their home as comfortable as possible.
  8. Foreclosure repairs: The recent increase of buying, repairing, and reselling home foreclosures will create a large new market for the home remodeling industry. The foreclosures often need major repairs and renovations, adding to the home remodeling boom.
  9. Energy efficiency: Despite the sluggish economy, going green is still a priority among the higher income, higher value home metro areas. Home renovations that will improve energy efficiency will continue increasing over the next several years, especially if the federal tax incentives remain intact.
  10. Reduced housing mobility: Many people that are locked into long-term, low-interest rate loans will not easily be able to move and qualify for an equal loan. Their lack of mobility will result in them choosing to upgrade their homes rather than moving into a new home with a new mortgage and a higher interest rate.

 

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