People are doing more remodeling projects
Q: Are people starting to remodel?
A: Yes.
About 28 percent of U.S. homeowners plan to remodel, expand or otherwise improve their homes in the next 12 months, according to the latest Bankrate Money Pulse survey. Millennial homeowners are the most likely age group to indicate they have plans to make home improvements. The survey was conducted March 17 to 20 by Princeton Survey Research Associates International and included responses from 1,000 adults living in the continental United States. The margin of error is plus or minus 3.8 percentage points.
A remodeling revival
As home prices plummeted and access to home equity vanished during the last recession, Americans cut back on their home improvement projects. But the remodeling market has rebounded in recent years. By one measure, called the Leading Indicator of Remodeling Activity, or LIRA, annual home improvement spending in nominal terms is expected to set a record in 2016.
“The last couple of years, in particular, we’ve been seeing the activity trending up with homeowners doing more projects, spending more on projects,” says Abbe Will, a research analyst in the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, which developed the LIRA.
“What really swings the market up and down is project mix and project size, basically,” Will says. “Are (homeowners) doing more replacement projects or bigger, more discretionary projects.”
An increase in discretionary remodeling helped drive spending up 5.3 percent in the fourth quarter of 2015, higher than the historical trend, Will says. That means more homeowners are tackling larger projects like bath or kitchen renovations.
Credit both a healthier economy and an improved real estate market, which has allowed people like Arnold to buy and then fix a home, while others have decided to stay put and finally tackle projects they put off during the recession, Will says.
The most popular projects
The Bankrate survey found that exterior work is the most popular type of home improvement. About 52 percent of homeowners planning a project over the next year indicate they want to work on their driveways, decks, patios, pools, landscaping or fencing.
Other popular projects include:
■ Installing new flooring.
■ Getting new windows, roofing or siding.
■ Renovating a kitchen.
That’s not to say the most popular projects are necessarily the best projects for homeowners to tackle, especially if the return on investment is an important factor in choosing what to improve.
Some of the more popular projects in the Bankrate survey are the least likely to provide a solid return, including renovating a bath, adding a master suite and installing wood-framed windows.
