Home
Photos
Archives
Profiles
Essays
Luke Ford
Lending Tree

Drops in Refinancing Puts Pressure on Remodeling Market

Catherine Brock writes:

Expensive materials, convenience features and added space are luxuries that most homeowners can no longer afford. Instead, home improvement funds are going towards maintenance and modernization projects-things like roofing and window replacement. Experts say that this type of controlled budgeting for home remodels is actually more in line with historic trends. For the foreseeable future, homeowners are wise to continue budgeting their remodels conservatively. Since home values are sluggish, big investments are unlikely to result in corresponding increases in property values. In some cases, an expensive remodel may actually make a home more difficult to sell. For the same reason, homeowners should also be careful in how they use their equity. Equity builds slowly when housing values are down; tapping it out entirely may leave the homeowner without options if an emergency arises. Gone are the days when home equity and fancy home remodels went together like milk and cookies. Housing contractors, as well as homeowners and mortgage lenders, are being forced to adjust quickly to a new set of economic circumstances.