In 2019, US homeowners are predicted to complete more than 12.5 million remodels valued at more than $1,000 dollars each. Remodeling is up 30% in the past five years, and given the state of the housing industry, it’s not difficult to see why. Home equity loan interest rates are low, and the costs of buying a home are going up. Here are a few of the reasons that single family remodels will continue to rise in 2019, and what it means for us in the construction industry.
Why the Remodeling Surge?
Remodeling has been on the rise for years. Many construction professionals are familiar with its popularity, but you may be interested to know why remodeling has surged as of late. Here are just a few key reasons for the remodeling boom:
Housing Boom in the 90s
In the 90s, there was a significant housing boom. As building technology evolved and improved, builders were able to put up more, higher-quality homes quickly. With their lower cost, these homes were attractive to many families, and builders completed a great number of them to meet demand.
Now, 20 years later, it’s time for renovations and larger-scale upkeep that will maintain the quality and livability of those homes. Twenty years is the average lifespan of most roofs, exterior siding, decking, and a few other large-scale components of a single-family home. The time for these big updates often sparks the renovation bug in many homeowners, leading to other updates in the interior of the home, like a kitchen facelift or a master bathroom remodel.
Aging in Place
There’s another growing trend in the US called “aging in place.” Essentially, it’s the idea that many homeowners plan to never sell their homes, downsize, or move into an assisted care facility as they age. With the cost of homes going up, many find that downsizing would cost them the same as their existing home already does, and with many baby boomers’ mortgages paid off, there’s not much incentive to move out.
Thus, remodeling to retrofit a home to baby boomers’ needs has grown in popularity. Expanding the first floor, adding on first floor master suites, and re-configuring floor plans to accommodate wheelchairs and walkers are popular renovations happening with these homeowners.
Millennials Starting Families
Millennials are starting to settle down into more permanent living situations, and have finally begun purchasing homes. The millennial homeowning trend, however, is to purchase a home that’s below budget, complete renovations that raise equity, and configure the home to better fit their living situation. Given rising housing prices, this is an option that makes sense.
Because the younger generation lives and works differently than previous generations, they require unique remodels that meet 21st century lifestyles. Home automation and security technology remodels are increasingly popular, as are remodeling projects that work to accomodate children, pets, and home offices as well.
Better Resale Value
One of the biggest incentives for today’s home renovations is a better resale value. According to the annual Houzz & Home survey released in 2018, two-thirds of renovating homeowners report that increasing their home’s resale value is an important consideration. As we mentioned before, home equity loans currently have low interest rates, and with increasing competition in the housing market, many homeowners are seeing equity for the full value of their home renovation, if not more.
In that same survey done by Houzz, one-third of kitchen renovators reported that their home value increased by at least the full amount of their kitchen renovation project. For those who do want to move on as they age, or are planning to relocate in the next few years, renovations that improve resale value are an attractive option and many homeowners are putting money into high-equity projects like kitchens and master bedrooms.
What This Rise in Remodels Means for the Construction Industry
Any rise in construction demand should be great for the construction industry. It’s good to see that remodeling professionals have plenty of jobs at their disposal, but given the shortage of construction laborers, it has thus far been difficult for the industry to keep up with demand.
We talked about the shortage of construction laborers in a previous article, and it’s true that this is the single biggest issue facing the construction industry today.
Remodeling is a growing trend, but many contractors can’t find the labor they need to handle the projects flooding in. This serves to underline the necessity of encouraging new talent to venture into construction and realize the opportunities at hand.
Following the housing crash and a significant push for young adults to pursue four year degrees rather than attend trade school, the construction industry has seen a lack of new labor that has yet to correct itself. The simple fact of the matter is that this isn’t a problem that will self-correct. Housing projects, from new builds to remodels are in demand, and will continue to remain in demand. It’s up to those of us already in construction to encourage young adults to enter into the industry.
As an independently-operated, fully-integrated lumber and building materials company supplying construction professionals in the Midwest, Zeeland Lumber & Supply is committed to furthering the construction industry. We’re working hard to encourage young professionals to consider a career in construction, and we support our existing partners, contractors, and builders with customized solutions, exceptional customer service and the highest-quality supplies.
For more information about Zeeland Lumber & Supply, and for reliable service and the quality materials your remodel clients want, contact us online, by phone at 888-772-2119, or at one of our Michigan and Indiana locations.