Whether or not the housing market itself is completely back from the burst bubble in ’08 is still up for debate. When it comes to home remodeling, though, the market is absolutely booming. According to the Boston Globe, national spending on home remodeling projects are projected to hit $155 billion and eclipse the current high mark of $150 billion set ten years ago. The data used in this projection comes from a new analysis by Harvard researchers.
“2016 is looking to be a stronger year for home renovation activity compared to 2015, thanks to the continued recovery in the owner-occupied housing market,” said Chris Herbert, managing director of the Joint Center for Housing Studies of Harvard University, in a news release. “Rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.”
According to the research done, spending on home remodeling will increase gradually at the start of the year and ramp up towards the end. First quarter home remodeling spending is expected to increase by about 4.3% and in the third quarter rise to 7.6%. According to the U.S. Census Bureau, 30% of remodeling activity was major additions and alterations, 40% minor additions and alterations, and 30% maintenance and repair.
There are many factors that influence when people choose to remodel, but the reasons why are generally always the same. The number one reason 78% of homeowners in one recent survey chose to remodel was to improve the look and feel of their space. After that 54% did so to make the space more functional, 52% to increase home value, and upgrading features/appliances was listed by 47%.
The piece also points out that home sales rose by 10% during the first 11 months of last year in Massachusetts, according to the Warren Group. Housing prices across the country are back on the rise for the most part, and it appears that spending on upgrading those homes is a top priority for many buyers and current homeowners alike.