Rethinking Home Renovations: An OverviewHome renovations are often viewed as a way of increasing the value of a home while customizing the living space to fit the homeowner’s tastes. However, recent times have seen a slowdown in the remodeling sector that has left experts wondering whether it is time to rethink the way we approach home renovations. In an interview with Yahoo Finance, Eric Finnigan, director of research and the demographics department for John Burns Real Estate Consulting, noted that, despite the current slowdown, a historic boom could be expected in the home renovation sector.
Slowing Down of Home Remodeling: What Are the Factors?According to recent data, home improvement spending in the United States fell by 3.5% in 2020, with the total amount spent on home renovations totaling $339 billion. This slowdown has been attributed to several factors, including rising costs for materials, a shortage of skilled labor, and a decrease in consumer confidence due to the COVID-19 pandemic’s economic impact. One of the significant factors contributing to the slowdown in home remodeling is the rising cost of materials. The pandemic has led to a shortage of raw materials such as lumber, which has driven up the costs of building and renovation materials. At the same time, labor shortages have made it difficult to find skilled workers, further driving up the costs of renovations. Key Point: The combination of rising material costs and labor shortages has made home remodeling more expensive in recent times, reducing the number of people who can afford to make renovations.
A Ray of Hope: Better Times Ahead for the Home Renovation SectorDespite the current slowdown in the home renovation sector, Eric Finnigan is optimistic about the future, noting that a historic boom could be expected shortly. According to Finnigan, several factors indicate a significant turnaround in the sector, including low mortgage rates, a desire among homeowners to customize their living spaces, and a cohort of older Americans looking to age in place. One significant trend driving the expectation of a boom is the aging-in-place trend, which involves older Americans making renovations that will allow them to stay in their homes as they age. Finnigan notes that this trend is expected to continue, driving up demand for home renovations among older Americans.
Understanding the Home Remodeling Trends in AmericaUnderstanding the current home renovation trends in America is essential for predicting future trends and determining how to cater to the needs of homeowners. Current statistics show that the top areas of home improvement in 2020 were outdoor improvements, kitchens and bathrooms, and interior painting. Homeowners are increasingly looking for outdoor improvements such as patios, decks, and landscaping, which allow them to enjoy their outdoor space more fully. At the same time, kitchen and bathroom upgrades remain popular, with homeowners looking to add value to their homes while improving their overall quality of life. Bullet points:
- Outdoor improvements, kitchens, and bathrooms are the top areas of home improvement in the US.
- The aging-in-place trend is driving up demand for home renovations among older Americans.
- The cost of building materials and labor shortages have contributed to a slowdown in the home renovation sector.
Expert Insights: Eric Finnigan’s Take on the Home Remodeling SectorAs a director of research and the demographics department for John Burns Real Estate Consulting, Eric Finnigan is well-positioned to offer insights into the home renovation sector’s future. According to Finnigan, significant trends driving the home renovation sector’s future include a desire among homeowners to customize their living spaces, low mortgage rates, and older Americans looking to age in place. Finnigan notes that as the population ages, there will be an increasing demand for home renovations that allow older Americans to live independently. This trend, combined with low mortgage rates and an increasing desire among homeowners to customize their living spaces, is expected to drive up demand for home renovations in the coming years. Key Point: Experts expect demand for home renovations to increase as the population ages and more homeowners seek to customize their living spaces.
Historic Boom in Home Remodeling: A Closer LookWhile the current slowdown in the home renovation sector may be cause for concern for some homeowners and contractors, experts like Eric Finnigan are optimistic about the future. Finnigan notes that several factors are driving expectations of a historic boom in the sector, including low mortgage rates, an aging population, and increasing demand for customized living spaces. One potential area of growth in the renovation sector is aging-in-place renovations, which could see an increase in demand over the coming years. Other areas of potential growth include home automation and technology upgrades, which allow homeowners to customize and improve their living spaces.
Driving Forces behind the Expected Boom in Home RemodelingSeveral driving forces are expected to contribute to the historic boom in the home renovation sector, including:
- Low mortgage rates, which make it easier for homeowners to finance renovations.
- An aging population, which is expected to drive up demand for aging-in-place renovations.
- Increasing demand for customized living spaces, as homeowners seek to improve their overall quality of life.
- Home automation and technology upgrades, which allow homeowners to customize and modernize their living spaces.