Amidst trade wars between nations and the growing political heat, there predicts an economic slow down brought about by a number of factors. The construction and renovations industry is just about a few that will be impacted by this forecasted economic decline.
Following many years of vigorous development, the growth of housing remodeling is projected to greatly reduce this year. Demand is slowing down as home values do not rise, mortgage rates rise, and home sales decline. Buying and selling are the main drivers of home renovation.
“Remodeling activities are often closely related to home sales, thus when homeowners are ready to sell homes, they may do some renovation just to get their homes all set to enter the market,” stated Abe Will, deputy project director at Harvard Housing Joint Center.
“New homeowners usually spend more time improving their home, building the home more suitable for their needs, personalizing it and doing a handful of work prior to moving in.”
Compared with long-term residents, new owners are spending about 30% more in repairing new purchases.
In respect to a new statement from HJCH, this is only part of the reason that home renovation growth is thought to fall down to its minimum level within three years.
General Contractors and Remodeling Firms Are Wary Of Market Decline
Justin Sullivan, a contractor for the renovation of an aged Washinton DC home, had been busy this cold season completely destroying some parts and adding a few on it. Nonetheless, he is among the contractors who not sure how where his business is heading to in six months.
“In general, architects are ahead of us by six months when it comes to foreseeing slowdowns, and we hear some architects, some design companies are slowing down, which may hit in about six to twelve months.”
Although the renovation business is anticipated to decelerate, it is expected that the project’s consumer spending will increase a little as construction costs remain high resulting in more expensive renovations.
The slowdown in overall projects will hit home improvement retailers like Home Depot, Lowes, Masco, and Sherwin-Williams. Sherwin-Williams just reported a disappointing fourth quarter, its CEO saying the weakness was “across the board.”
The overall slowdown has impacted home decor retailers such as Masco, Home Depot, Lowes, and Sherwin-Williams. Sales of consumer construction products including lumber and composite decking are expected to go down. A large part of this is due to the rising mortgage interest rate, which leads to weak consumer confidence in the overall housing market thus leading to renovation projects more expensive.