Home Remodeling Posts Strongest Growth in Years

“In the near term, homeowner spending on improvements is expected to see its strongest growth since the height of the housing boom,” says Kermit Baker, director of the Remodeling Futures Program at the Harvard Joint Center for Housing Studies.

Home remodeling is posting a strong recovery as more home owners regain equity and look to spruce up their homes.  Projects surged 14 percent in September over year-ago levels, according to BuildFax, which tracks building permits.

However, smaller remodeling projects — those under $10,000 — are dropping.

One reason behind the trend is that regular home owners may be starting to renovate more and spend more as they regain equity. In recent years, remodeling activity was mostly dominated by smaller projects from investors who had purchased single-family homes to turn into rentals. Investors are lessening their share in remodeling as regular home owners show more interest in home remodeling. Your comments?

Source: “Remodeling? Now you can snoop inside your neighbors’ kitchen,” CNBC (Nov. 19, 2013)

Bigger Mortgage Rates, Smaller Homes?

As the costs of mortgages get bigger, could the size of homes purchased get smaller?

According to financial Web site The Motley Fool, interest rates and home size are closely tied together. “As interest rates fell in the late 1970s, home sizes grew,” Motley Fool reports. “As rates rocketed in the early 1980s, home sizes contracted. After reaching a peak in the 1980s, mortgage rates have fallen precipitously, and homes have grown in almost every single year since.”

That’s because as mortgage rates rise — as they are now — buyers can afford less. Mortgages at a 5.5 percent annual rate are 12 percent more expensive than at a 4.5 percent rate, Motley Fool notes. If rates climbed up to 6.5 percent — where they were about six years ago — monthly mortgage payments would be nearly 25 percent more costly than a 4.5 percent mortgage rate.

In 1975, the average home built was 1,535 square feet. In 2010, that grew to 2,169 square feet, according to U.S. Census data.

As mortgage rates rise again, buyers who are priced out may be able to still jump in by purchasing a smaller home, according to Motley Fool. Home buyers may be lured to smaller homes constructed 30 or 40 years ago, which could require some remodeling.

Source: “Higher Mortgage Rates Could Revitalize Smaller Home Sales,” The  Motley Fool (Sept. 2, 2013)

Kitchens Get a Cozier New Look

Kitchens are losing their image as just a place for cooking. They’ve also become a place to gather with family, entertain, and even work, which is influencing how buyers are perceiving the possibilities of the space. As such, more home owners are trying to make it feel less like a kitchen and more as an almost second living room. 

For example, some home owners are opting to hide their appliances, such as with under counter refrigerator drawers and dishwashers-in-a-drawer, a trend that the National Kitchen & Bath Association noted earlier this year. 

Another trend catching on: Fewer upper cabinets. A kitchen filled with cabinetry is a hard look, says Susan Serra, a home designer in Huntington, N.Y., who specializes in kitchens. Less kitchen cabinets make a kitchen feel more open and allow the walls, windows, and light to show through. 

In 2003, Serra began her own kitchen home renovation, seeking to add more comfort into her kitchen. She added a sofa near a window nook (raising the sofa up so it was proper dining height) and a 36-inch, recessed television in the breakfast area. She also removed the wall kitchen cabinets, keeping only doorless, base cabinets that she hid with a long skirt on a curtain rod. 

“Putting comfort into the kitchen was amazing,” Serra says. “It encouraged socialization, people wanted to hang out in the kitchen, look out the window, and watch media.” 

Serra and interior design expert Ashley Whittenberger, founder and owner of Interiority Complex, provided tips in REALTOR® Magazine this month on how you can stage a home for sale using this cozy kitchen trend, such as how to use kitchen islands and lighting to create the look. (To read their tips, read Buyers Want Cozy, Connected Kitchens.) 

By Melissa Dittmann Tracey, REALTOR® Magazine

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