Home renovation boom slows down, but still going on

NORTH DAKOTA (KXNET) — Home renovations became a huge thing during the COVID-19 pandemic, and they’re still going strong.

Spending is expected to grow another 1.2% by the third quarter, according to the latest Leading Indicator of Remodeling Activity (LIRA) report.

The increase is a sign that the housing market might be leveling off — correcting from the pandemic. Interest rates were low at the time, which motivated people to sell since the homes were up-to-date.

Abbe Will, the associate director of the Remodeling Futures Program, called it “the big boom,” which suggested that people were catching up on the work they wanted to do.

“It was also probably people doing work that they hadn’t quite planned to do, but it was just a convenient time, a better time. I think this is a little bit of a resetting to more normal rates, although we’re not there yet,” Will said. “Even though growth in the market hasn’t been the raging 10% year-over-year or 15% year-over-year growth that we saw during the first couple of years of the pandemic, we’re still expecting a lot of spending.”

However, there’s been a slowdown in the market over the past couple of years.

Renovation spending is supposed to grow into 2025, and that shouldn’t be surprising.

“A continued thaw in new-home construction and sales of existing homes bodes well for an uptick in residential improvement and repairs next year,” said the Director of the Remodeling Futures Program, Carlos Martin. “Additionally, stronger gains in home values and thus home equity levels should boost both discretionary and ‘need-to-do’ replacement projects for owners staying in place.”

The LIRA report comes with a survey from Clever Real Estate about attitudes and trends — finding that 63% of homeowners would rather remodel their current home than move into one that’s already been renovated.

Those who were surveyed were split on why they were renovating — it was between renovations for repairing damage, increasing comfort, improving the livability, improving its aesthetic appeal, personalizing the home, and increasing the home value.

41% of homeowners who finished renovations reported significant delays, and 78% said they went over budget.

The most popular renovations included bathroom remodels, interior painting, and heating and air-conditioning upgrades.