Strong Housing Market Prompts Homeowners to Spend on Remodel Projects

Strong Housing Market Prompts Homeowners to Spend on Remodel Projects


Home prices have been up quite a bit. In fact, they’re up 45% since the low point that they hit in 2011. You know, the Great Recession had a material impact on home prices in this country, but we’re now starting to get back to levels similar to, or close to, what we saw prior to the recession, and that’s good for homeowners. Homeowners look for the money’s out of their house to be able to improve their home, and in fact our data indicates that, using our retail spending monitor which shows the spending on all forms of payment. Building, hardware and garden stores are actually up about 7.4%. They’re outpacing almost every other discretionary category as people decide to remodel their homes. People are remodeling their homes for a number of reasons, and part of this is related to the supply of homes that we have. There’s just not enough homes on the market today. There’s a number of reasons why that is the case. We don’t have enough construction workers. Builders aren’t building homes as fast, and it’s creating an imbalance between supply and demand, and so that’s why prices continue to rise. Now, building, hardware and garden stores again have been outpacing retail spending and I’ll take out less autos and gas just to look at a overall retail category, have been outpacing that for a number of years now, so this is not a recent phenomenon. It’s been going on for about four years, and that’s very positive for this particular sector. One of the areas that we looked at was the regional changes between building, hardware and garden stores sales. Not surprising, where sales and homes have continued to rise, we also see a rise in the building, hardware and garden space in terms of their sales growth. A lot of that is happening on the west coast of the United States. Further analysis of our data indicate the demographic spending of building, hardware and garden, and we see if you look at those people over the age of 50, they represent about 60% of the overall spending in this sector. Now why is that? Baby boomers are upgrading their homes, they’re choosing to live in their homes longer, and in many cases retiring in those homes.

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