Here’s why homeowners are pumping the brakes on home remodeling spending

With homeowners staying in their homes longer these days, it’s no surprise that they’ve dropped a lot of cash on big-ticket home improvements in recent years. But new research suggests homeowners are pumping the brakes on how much they’ll shell out for remodeling projects this year.

After home remodeling spending hit a record high of nearly $425 billion in 2017, annual gains are projected to slow in more than half of the nation’s largest housing markets in 2019, according to a report from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

The pace of spending by homeowners is expected to cool in 29 of the 49 major metros the Remodeling Futures Program tracks in comparison to 2018 gains. What’s more is researchers estimate the annual growth in home improvement spending will fall to the lowest rate in three years in nearly half of the housing markets studied.

Researchers say pronounced slowing is likely in markets such as San Antonio, Texas, Kansas City, Missouri, Pittsburgh, Buffalo, New York and Dallas.

In some housing markets, though, remodeling spending will actually see an uptick, according to the report.

“Despite the broader deceleration, remodeling gains should remain strong and even accelerate through year-end in some areas of the country, including Orlando and Las Vegas where remodeling permitting, house prices and homebuilding have picked up,” says Elizabeth La Jeunesse, senior research analyst in the Center’s Remodeling Futures Program.

“Regionally, the strongest growth in 2019 is expected to be among metros in the West, paced by projected growth of 8 percent or more in Sacramento, Denver, Seattle, Tucson, San Jose and Las Vegas.”

Here’s what’s driving the expected declines

Several forces on a macroeconomic level are giving homeowners pause before pursuing big-ticket projects, such as kitchen upgrades or basement finishing.

“Metros with cooling home prices and sales activity are not able to sustain the same pace of investment in home improvements as in recent years,” says Chris Herbert, managing director of the Joint Center for Housing Studies.

Source: https://bit.ly/2YrNg8q