Surpassing even the pre-recession peak.
Spending on home renovations and repairs is expected to peak at $327 billion in 2017, according to a report released Thursday by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. That surpasses the previous peak in spending, in 2006, before the start of the recession.
With incomes rising nationwide, homeowners are focusing on discretionary projects—such as that kitchen remodel they’ve always wanted—rather than just necessary repairs, like fixing a leaking roof, said Abbe Will, a research analyst with the Joint Center. Popular projects include interior room revamps and additions of outdoor spaces like decks.
“Homeowners are feeling much more confident,” Will said. “They’re now investing work that could be put off before.”
By the middle of 2017, according to the Joint Center’s projections, renovation expenditures are expected to climb by as much as 8.3% from the same time in the previous year before tapering off in the second half of the year.
Renovations are popular even though homeowners don’t always recoup the costs of some common upgrades. Remodeling’s annual Cost vs. Value survey shows that a kitchen remodel recoups about 65% of its cost at resale, roughly the same as a deck addition. (The projects with the best payback, in case you’re wondering, are replacing entry and garage doors.)
Will notes that you shouldn’t expect to earn back 100% of the cost of home repair projects, particularly in today’s competitive housing market. “You should pursue a project you’re excited about and comfortable spending on,” she said. “Don’t worry necessarily about the value you’re adding to your home.”
Source: Money Magazine
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