While it may be true that remodeling activity suffered a decrease in 2011′s third quarter, it conversely reached a new record high back in September.
Those two statements may seem to contradict each other, but they really don’t. It turns out that, year-over-year, September 2011 saw a remodeling activity rate increase of 34%, according to the most recent Residential BuildFax Remodeling Index. Throughout the country, every region saw an increase in remodeling — 2.9% in the Northeast, 4.6% in the West, 4.9% in the Midwest, and a notable 9% in the South.
What are Americans choosing to remodel the most? The breakdown comes out looking like this:
- Roof (21.4%)
- Deck (7.9%)
- Bathroom (6.9%)
- Garage (6.1%)
- Kitchen (4.8%)
- Basement (2.9%)
- Office (1.7%)
- Sunroom (0.7%)
So why the resurgence in remodeling? Basically, it boils down to economic and financial reasons. Many Americans don’t have the funds to move, so they instead choose to refinance their mortgages (thanks to “the historically low interest rates, now under 4.0 percent for 30-year fixed rate mortgages”) and use that extra money to renovate their home in order to up the comfort and habitability quotients, and possibly even the overall value of their home. (Although there are some renovations that aren’t worth the cost.)
BuildFax’s Vice President of Research and Development, Joe Emison, explains it this way:
“Mortgage rates continue to be near record lows, and as homeowners from coast to coast refinance, they are continuing to update their current home and invest in their properties. … The data from BuildFax show that homeowners are not only doing important ‘maintenance’ projects, such as fixing their roof, but also taking on projects that add to the ‘livability’ of their homes by adding decks, remodeling their bathrooms and updating their kitchens. These are immediate fixes they will enjoy and that potential buyers look for.”
What’s more, expect this trend to continue for a while — the Federal Reserve says interest rates will stay low until 2013.
Sounds like a good time to fix that roof.
Stephanie Huskey is the resident real estate blogger for Movoto and would like to wish all her American readers a very safe and happy Thanksgiving! Interested in getting her advice on your blog? She’s currently seeking guest blogging opportunities so she can share her knowledge with new communities! You can find her over here at Elance.com.