It's been 14 years since the market began to recover, and the average home is now worth 57% more than pre-recession values. Last year, homeowners and remodelers were asked when they expected prices to go down, and the results were revealing. Half of homeowners (50%) anticipated a decrease, while only 1% of remodelers shared that expectation. In other words, 99% of remodelers expected costs to increase.
So what do they know that landlords don't?The answer lies in the fact that inflation is caused by imbalances in supply and demand. During the height of the COVID-19 pandemic, the economy shut down and households stopped spending on non-essential items such as travel, entertainment and restaurants. Merchants had no choice but to raise prices to stay afloat. This has had a direct impact on the housing market, with higher interest rates and skyrocketing prices; the average list price of a home in the United States is now higher than ever. Remodelers are also aware that wood prices have increased, driving up the cost of building a new house and renovating an existing one.
People who are preparing to start with those home improvements may find higher prices, as well as delays in obtaining materials for larger projects. In fact, experts anticipate that “annual growth in home renovation and repair costs will reach 8.6% in the second quarter of next year. The increases in wood prices have been driven in part by inspiration from popular TV house remodeling programs and millennials who buy historic old homes with big plans to renovate and update them. While now may not be the most economical time to do them, if you want (or have) to complete your project now, here are some tips to make renovating your home more affordable:
- Do your research: Going blindly into a home renovation project is an almost guaranteed way to spend much more than you expected (or needed). Make sure you understand what materials you need, how much they cost, and where you can get them.
- Shop around: Don't just settle for the first contractor or supplier you find.
Compare prices from multiple sources to get the best deal.
- Be flexible: If you're willing to be flexible with your timeline or materials, you may be able to get a better deal.
- Look for discounts: Many suppliers offer discounts for bulk orders or for buying during certain times of year.
