We've talked about the recent uptick in demand for home remodeling, and as we approach mid 2016, it's clear that this trend is only going to continue. According to Harvard University's Joint Center for Housing Studies, home improvement spending is expected to reach its highest level in a decade in early 2017.
But what's behind this renewed passion for home remodeling?
Low inventory of homes on the market.
According to the National Association of Realtors, there was 4.5 months of housing inventory on the market as of March, which means that it would every house on the market to sell at the current pace of sales. In other words, the current real estate market benefits sellers rather than buyers as there is a shortage of housing inventory.
Fear of rising interest rates.
We've been hearing for quite some time that mortgage rates are going to rise. While you can secure a 30 year fixed rate of 3.60 percent today, the Mortgage Bankers Association predicts that the 30 year fixed rate will increase to an average of 4.70 percent in 2017 and 5.20 percent in 2018.
Considering this, many homeowners are choosing to stick with their existing low interest rates that they feel comfortable with rather than take out a new mortgage with a potentially higher rate.
With an improving economy, homeowners now feel more comfortable to use cash to pay for more discretionary home remodeling projects, such as updated kitchens and bathrooms with high-end finishes.
Also, an improving economy means that home values are increasing. As a result, homeowners now have more equity in their homes that could be used for home remodeling projects.
Increasing home prices.
We just mentioned that today's homeowners are benefiting from an increase in home values. However, this also means that if you enter the home buying market, you'll likely pay more for a home than you would have a few years ago.
With that being said, instead of paying more for a new home, some people are choosing to stay in their existing homes and spend the money to remodel.
Of course, if you do truly want a new home, going the custom home building route can help you to overcome a number of the issues mentioned above.
To learn more about how the home remodeling process works and what the latest trends are in Central Florida, please contact us at Empire Custom Builders. We have successfully completed more than 500 projects and can provide you with the experience and expertise to help you get your dream home.