According to the Residential Remodeling Index, year-over-year remodeling growth is still on the rise. The third quarter of 2015 saw a 1.3% increase from the quarter before and an almost 5% increase over 2014. There may be several factors for this.
People are staying in their homes and updating
More people are deciding to stay in their existing home and are ready to invest some capital into making their homes more livable. The trends in the last ten years have changed dramatically, and homeowners want their design aesthetic to be more in lock-step with current trends. Master Bathroom remodeling, smaller bathrooms, and kitchens are still the main focus of major renovations. These are also the spaces that make the most difference in the comfort of a home. Carpet and paint are also high on the list.
Homeowners are anticipating the rise of interest rates. The Fed has kept rates low for the last six years which has helped the economy. Homeowners may see an end to those low rates as early as this quarter. However, a higher interest rate may stun most adult Americans who have enjoyed relatively reasonable interest rates. A higher interest rate may stunt large purchase spending including plans for remodeling. The thinking is if the Fed doesn’t raise rates and the economy is in trouble, there is nowhere for rates to go. Raising rates during better economic times helps the savers and not the borrowers. Pension plans have been hurt because it was harder to make money from riskier investments as the interest rate paid to saving accounts were smaller.
Homeowners are anticipating selling
As baby boomers age, their children are off to college or getting into houses of their own. They no longer need a larger home and are selling to downsize. Updating the house to get ready for a potential sell, is another reason remodeling has seen a steady rise. Boomers are making sure the inside and the outside of the house (including the driveway and the yard) are updated to increase the curb appeal of the home.
The kids may be out of the house now, and Baby Boomers want to turn the teenager’s rooms into guest rooms for visitors. They also desire a more livable outdoor space or a basement. They may also be considering adding a home office as more employees are working virtual. According to the latest Global Workplace Analytics, 50% of the U.S. workforce holds a position that allows for teleworking and up to 25% of the workforce telecommutes with some frequency. 90% of people say they’d like to work from home, at least, part-time. The fact is that 50-60% of employees with Fortune 1000 companies are not at their desk 50% of the time. A home office or a place to office is now part of the remodeling plan.
Making changes to your homes’ interior and exterior are thoughtful projects. One of the best places to start this process is at the local home shows. Take advantage of show specials and check out vendors for all of your home projects. In 2016, Kansas City residents will fill the aisles at the Johnson County Home and Garden Show, January 22-24, The KC Home and Gardening Show, February 12-14 and The Home Builders Association of Greater Kansas City Show at Bartle Hall March 18-20. Plan to attend one if not all of the shows and visit the professionals at Concrete Raising Company if you have a sunken concrete driveway, sidewalk, basement floor or porch. Before visiting their booth, look at their website and customer reviews. The owners were both previous home builders and bring that knowledge and experience to bear on each and every quote they provide.
Staying and remodeling or remodeling and selling; homeowners may want to take advantage of interest rates now. Good preparation and planning can start at your local home show. When you do visit, make sure to stop and see Ken and Jason at Concrete Raising Systems!