Remodeling industry has room for recovery

As the correction in housing continues, the remodeling industry is suffering right along with other sectors. Shrinking home equity is causing many people to scale back or put off home improvements, while other homeowners are struggling just to make their mortgage payments.

“Earlier this decade, the ability to borrow against equity created by rising home prices fueled remodeling activity, as well as broader consumer spending,” said Nicolas P. Retsinas, director of the Harvard University’s Joint Center for Housing Studies, in a news release. “Now that prices have softened, owners cannot finance home improvement projects as easily. Even those with equity find credit harder to obtain due to tighter standards.”

But remodeling’s downturn won’t be as severe as the one in home building, according to a report released Wednesday by the center’s Remodeling Futures Program. There are a few reasons why, including:

• A continued interest in “greening” America’s homes, particularly in making them more energy efficient. Consumers are looking for products and systems that will provide them with lower energy bills like building insulation upgrades.
• Foreclosures typically require improvements before they are fit to live in, and the market is flooded with foreclosure inventory. The remodeling industry will benefit as more people buy these properties and fix them up.
• An aging rental stock in need of improvements and a growing population of immigrant homeowners also will create remodeling demand and help reverse the downturn.

Read full article here:  Remodeling industry has room for recovery: Harvard study – MarketWatch.

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Posted by admin on Feb 4 2009. Filed under Home Improvements News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.