Spring and summer mark the beginning of home improvement season. It seems this year homeowners will be taking out loans to complete their projects. Some will do so in order to sell their home, others simply to make it better. Favorable market conditions and national surveys both indicate the spring time is the right time.
Consumers are willing to fund home improvement through loans this year
According to the Joint Center for Housing Studies at Harvard University, spending on home improvements in the United States in 2015 will likely exceed the record of $324 billion, reported MarketWatch. Interestingly, people will be taking out home equity loans in order to do their improvements. Todd Nelson, business development officer at SunTrust Bank, commented that all the spending on homes is good for the economy for myriad reasons. In addition to potentially raising real estate prices organically, the spending also means more consumer-driven economic activity.
"Consumers are increasingly putting money back into their homes," said Nelson, according to the news source. "This is good for the economy and the home-improvement industry overall."
Increased demand for home improvement products witnessed in the retail market
In a SunTrust survey of approximately 1,300 homeowners last month, it was discovered that while the number of Americans willing to spend over $5,000 on home improvements has not changed dramatically, the number of of people looking to pay for the work using loans has increased from 21 percent last year to 30 percent in 2015. The home improvements are also not only for homeowners looking to beautify their homes, they are also brought on by landlords looking to charge higher rental rates, noted MarketWatch. The increased demand was easily observed in the retail market, as Home Depot not only posted better quarterly results, but announced it would hire additional workers as well – in the range of 80,000 for the warmer seasons. Millennials were also proponents for increased spending, explained Chris Herbert, managing director of Harvard's Joint Center for Housing Studies.
"The millennials' increasing presence in the rental market has already helped to lift improvement spending in that segment," said Herbert, reported the media outlet.
Reasons why home improvement spending is up this year
Market Watch pointed out the reason consumers are willing to take out loans this year is because of favorable market conditions. The stock market is performing well, so it it would not make sense to take money out of rising stocks to fund the projects.
"Taking money out of a hot stock market doesn't necessarily make sense, especially when well-qualified consumers can borrow at extremely attractive rates," added Nelson.
The homeowners surveyed by SunTrust indicated that most are interested in remodeling for the purpose of improving their home, but 8 percent were doing it to increase the value of their properties and make them more saleable in the future.
The Hutchinson News gave advice for homeowners looking to sell their place and advised working with a realtor. According to a survey by the National Association of Realtors, 88 percent of sellers rely on agents to market their homes. Because realtors have valuable experience and are familiar with the selling process, they can help owners maximize their chances receiving a good price.
If you are looking to sell your home soon, find a nearby realtor and study your neighborhood. Such consultation and research can help you set the proper asking price, based on comparable properties. Studies show that homes not in-line with neighborhood property values do not sell easily. Finalizing the process might be your most important priority, but a realtor can help you avoid overpricing your home, which could negatively affect your chance for a good sale over the next few months.