This article provides information on the home remodeling market and the different forces which shape the home remodeling market. The remodeling market is tied to certain factors, including the wider economy and the local real estate market.
Remodeling is a common project that homeowners take on. If you are looking to remodel your home, it is important to keep in mind that this involves more than just improving your living area. If you remodel your home, you might also be expected to generate a return on your investment.
In prior years, a home remodel meant an increase in the value of your home. Furthermore, some people actually make money by buying homes, fixing them up, and selling them. This is commonly called “flipping.” Unfortunately, like other sectors of the economy, this market ebbs and flows. Recently, it looks like the drive to remodel homes has taken a downturn.
In this post, we will give some information that can help you navigate the remodeling market. Understanding home remodeling financing can be useful to help you determine whether a remodel is the right decision for you. Even though many homeowners conduct a remodel with an investment purpose in mind, investment doesn’t need to be the sole reason to do a remodel.
A remodel may be necessary when you simply wish to upgrade either the function or appearance of your home. If you have an older kitchen, for instance, you may decide to conduct a remodel to install new appliances and create a kitchen with a new, sparkling appearance. Let’s take a look at some tips to help you navigate the situation.
Why Homeowners Steer Away From Remodeling
There are financial and real estate professionals who analyze this market just as other professionals look at other areas of the economy. According to the professionals, there are a number of reasons why people might be steering away from a home remodel.
First, there has actually been a decline in home sales. This goes along with a decline in homebuilding activity.
These factors cause homeowners to hesitate when they remodel their homes. If you are looking to sell your home, this is a prime time to remodel. You might think this remodel is necessary for your home to succeed on the market. If you aren’t looking to sell your home, there is less reason to remodel. When home sales drop, the remodeling market drops as well.
Home Price Appreciation Plays A Role
Another important factor involved in the home remodeling market is the pace of home appreciation. In prior years, the growth of home prices was outpacing the rate of income appreciation. In recent years, this trend has flipped.
When home prices aren’t rising faster than wages, there is less pressure to remodel. Instead of investing this money in a remodel, homeowners are looking to invest this money in other areas that might generate a bigger return. This has led to a reduction in the remodeling market.
The Role of Rental Properties in the Remodeling Market
Another factor that plays a role in the remodeling market is rental properties. Only a portion of all remodels are done on primary residences; a good amount of remodels are conducted on homes which are owned specifically for rental purposes. Sometimes a rental property owner will take out a remodeling home loan in order to perform maintenance or to make certain improvements.
Both of these things will improve the marketability of the rental property and help to command higher rents. This is another way in which the remodeling market is tied to the general economy: renters need jobs in order to pay the rents demanded by rental property owners, and so an area that is underperforming economically may see fewer remodeling home loans. An underperforming area may not be able to supply the renters who would make a remodeling investment worthwhile for a rental property owner.
Considering A Home Remodel
If you are looking to remodel your home, think about these factors ahead of time. You should expect a return on your remodeling investment. Take a look at the market before the remodel begins.
However, even though it’s reasonable to expect a return on your financial commitment, you should have expectations that are consistent with the wider market. And, as mentioned previously, you shouldn’t always be deterred from conducting a remodel simply because you may not receive the maximum return possible. If you intend to remain in your home for a significant period of time, a remodel can add substantially to your overall quality of life.
If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional to discuss financing options. Obtaining a remodeling home loan is fairly straightforward; get in touch with us to understand the process.
Contact Sammamish Mortgage to Learn More
As you can see, home remodel finance is tied to the general economy and the wider real estate market. Hence, if you’re approaching remodeling from an investment perspective, you should be aware of what’s happening around you. You need to know how the local property market is doing and how the local economy is performing.
If you need further information on home to remodel finance, remodeling home loans or related topics, contact Sammamish Mortgage today. The mortgage professionals at Sammamish Mortgage have an in-depth knowledge of the remodeling market and are available to consult with you.
What’s more, if you’d like to conduct a remodel, our team can help you walk through the process of obtaining a remodeling home loan. Contact us today to learn more, and visit our website to View Rates to check current mortgage rates. You can also get a Rate Quote instantly and even Apply Now if you’re ready to start the process. We look forward to hearing from you!