As affordability concerns continue to haunt homeowners across the country, many are choosing to remain in their homes, prompting a surge in the home renovation market.
In fact, data from Buildfax states that within the past five years, home remodeling has increased by about 30%.
Furthermore, data from NerdWallet’s latest Home Improvement Report revealed that from 2015 through 2017, Americans worked on 113 million home improvement projects, spending $449.5 billion.
However, the Home Improvement Report indicates that more than 30% of Americans have not set aside funds for these renovations.
The report explains this is especially alarming as, 44% of homeowners experience their first unexpected repair within the first year after closing.
“Typically, renovations happen just before or just after a home is sold,” NerdWallet Expert Holden Lewis said. “Now, a shortage of affordable homes and higher mortgage rates mean people are staying in their current homes longer.”
“Mortgage rates have been rising for two years and lots of homeowners are locked into low rates they don’t want to give up by selling their current home, so they’re fixing up instead of moving up,” Lewis continued. “This paired with first-time homeowners buying homes in need of renovations — because that’s what’s available — seems to be driving a lot of home improvement spending.”
NerdWallet states that 48% of American homeowners say unexpected home repair costs have caused them anxiety, which is why they presume 5% of homeowners are waiting for damage to occur before getting issues fixed.
“Unexpected home repair costs can be a nightmare, especially for first-time home buyers,” Lewis said. “Buying a house is expensive, given closing costs, moving and the stuff you fill your new home with. On top of all those expenses, you’re expected to keep some savings in reserve for emergency repairs.”
Despite these financial concerns, 72% of homeowners say spending money to improve their homes will always increase the overall value.
NOTE: On the behalf of NerdWallet, the survey utilized data collected from the Harris Poll. A total of 2,001 American adults were surveyed from September 27 through October 1, 2018.
