Americans are pouring record amounts into home remodeling this year. A shortage of new single-family homes, along with surging home prices, is locking many buyers out of the market, The Wall Street Journal reports. That has prompted more homeowners to turn to renovating their existing home.
Americans are projected to spend a record $316 billion in home remodeling this year, according to Harvard University’s Joint Center for Housing Studies. That is up from $296 billion one year earlier. Homeowners are tapping into their savings or home equity to complete the renovations. They are showing an increasing confidence once again in wanting to invest in their homes
Since the housing crash, first-time homebuyers who finance their homes through the Federal Housing Administration (FHA) and the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have outnumbered repeat buyers every year, according to data in the Urban Institute’s July Monthly Chartbook. Before the crash, these roles were reversed. Much of the increase in first-time homebuyer activity has been through the GSEs. As of this past April, 47.8 percent of mortgages backed by government-sponsored enterprises (GSEs) Fannie and Freddie went to first-time homebuyers, the highest level in 15 years, according to the Chartbook. The GSEs’ share of first-time homebuyers stood at about 40 percent from 2007 to 2013, but has been rising over the past few years.