People remodel their homes for various reasons; to get a higher price when selling, to improve the look and feel of the property, and to prepare for retirement. According to the residential remodeling index, home renovations are on the rise. This is due to the age of homes across the United States. With 40 percent being over 50 years old and 80 percent being over 20 years old, there are millions of homes that need renovating. Many homeowners are now taking it upon themselves to complete these renovations. According to real estate agents, the best improvements to sell house are the kitchen and the bathroom. Both of these should be upgraded before putting a house on the market. Some of the best value home remodeling has also taken place in the backyard. Homeowners can see upwards of 10 percent returns on upgrading a backyard, almost as much as a kitchen or bathroom. Flooring is another area that needs upgrading in most homes. Today there are many types of options available; carpet, bamboo flooring, vinyl, laminate, hardwood, and more. For some, buying a house to renovate and then sell is something they have always wanted to do for a career. If you have many DIY remodeling ideas and you’re good at them, flipping houses could be for you.
Demand for home remodeling services is only expected to continue to climb. According to data from ComfyLiving.net, some 80% of American houses are at least 20 years old. Not only that, according to Forbes, about 40% of American homes are up to 50 years old or more. The national contractors association of Associated Builders and Contractors reports a slight increase in residential work from October 2019 to 2020. However, more and more individuals are taking it on themselves to perform remodeling today. Youtube and other websites offer fast, valuable remodeling advice that take a lot of the guesswork out of the job. Value remodeling is especially popular right now as more homeowners look for inexpensive ways to increase their home’s value or simply change things up around the house. Kitchen and bathroom remodels tend to be the most popular work being done while other homeowners are choosing less intensive remodeling like new wallpaper, paint or interior decor accents. According to ipropertymanagement.com, in 2018 alone America saw some $400 billion in home improvement sales that will move closer to $500 billion by 2022.
The first-quarter results of the 2015 Residential Remodeling Index, which examines activity in the remodeling and replacement industries, showed a 4% year-over-year increase, Metrostudy announced in late May. That’s the strongest gain since the first quarter of 2014, when the RRI went up by 5.3%.
“The Residential Remodeling Index strengthened in first quarter 2015, fending off any kind of seasonal dip to remain in a period of steady expansion. Remodeling activity in the U.S. continues to benefit from healthy job gains, increased consumer sentiment, and better household formation numbers,” Brad Hunter, chief economist at Metrostudy, said in a news release.
Metrostudy, which is a Hanley Wood company, predicts that the remodeling market will completely recover from its lowest point (reached at the end of 2011) by the third quarter of 2015. That would take a reading of 100.0 or higher; the reading for the first quarter of 2015 was 98.6. The latest reading also represents the 13th consecutive quarter of gains.
Out of the 381 Metropolitan Statistical Areas considered by the RRI report, 380 are expected to see growth in 2015. That growth should average around 5%.
Remodeling is intimately tied into economic factors such as the job and housing markets. More and more Americans are feeling comfortable remodeling as job gains in April eased fears that the economy is slowing down again, according to the Metrostudy team. There’s still some hesitation, however, because of a lack of wage growth.
Sales of existing homes often lead to more remodeling as well, as similar recent reports have noted, both because homebuyers want to customize their new purchases and because sellers often remodel certain parts of homes (kitchens and bathrooms, for example) hoping to get higher offers. Of course, not all remodeling decisions are linked to resale value; one 2013 survey found that the vast majority (79%) of respondents were remodeling their kitchens simply to “improve their look and feel.”
And Hunter noted that the group that’s spending the most on remodeling right now is actually comprised of older homeowners modifying their homes so they can age in place. “Remodeling and replacement activity is high right now for those with fatter wallets, mainly baby-boomers and mature families,” he added.
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