The U.S. housing market hasn’t completely recovered since the crash of 2008, but a new article in the Wall Street Journal discusses how one sector of the construction industry is on the rise.
According to the article, expense for repairs and remodeling is expected to surpass $300 billion this year, ahead of the previous high of about $285 billion in 2007. While that number alone should bring smiles to those in the industry, it’s even more staggering considering the spending on single-family home construction remains 40% below the levels of a decade ago.
So why the uptick in this sector? According to experts, the “unusual nature of this housing recovery – with very low inventories of homes for sale, often leading to price appreciation and bidding wars – has prompted many homeowners to stay put and improve the home they already have.”
Recent studies show that the number of for-sale listings as a percentage of occupied households has hit a record low in 2016, which means many prospective home buyers aren’t making a move.
Another reason for the increase in repairs and remodels is because they can be done in phases. Plus, many homeowners feel that with each upgrade, they boost the value of their home and eventually can trade up as the market stabilizes.
One final factor expected to drive spending on remodeling is the fact that American homes are aging. More than 65% of the nation’s housing stock was built more than 30 years ago, up from 47% in 1995.
Overall, spending on home repairs and remodeling is expected to grow over the next three years and will continue to outpace new residential construction through 2019.
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