HomeLine
Home Improvement Trends
According to Fitch Ratings, home improvement spending will increase 3.5% in 2010 over 2009 levels. This spur of activity is largely attributed to the first-time homebuyer incentives.
Existing home sales are traditionally a strong driver of home improvement spending, as sellers often renovate and buyers often remodel. Existing home sales fell 13.1% in 2008, rose 4.9% in 2009 and are expected to rise 2.5% in 2010.
Current home improvement trends highlight those with universal appeal and a reasonable price tag. Seven of the top 10 projects, according to Remodeling Magazine's Cost vs. Value Report, were exterior replacement projects such as windows, doors and siding. This is because curb appeal is king. Topping the list were a steel entry door, with a project return of 128.9%, and fiber-cement siding, with a project return of 83.6%.
Increasing the number of bedrooms is also popular because adding space adds value. Converting an attic into a bedroom jumped to the third spot in cost recouped. With a costly average price tag of $49,346, it is nevertheless the least expensive way to add conditioned living space. The project provided a return of 83.1%.
Inexpensive ways of sprucing up the home, such as painting, cleaning carpets and replacing old fixtures, are popular. Improvements that increase energy efficiency and cut down on utility bills are getting a big boost because of their eligibility for federal tax credits through the end of 2010. Certain appliances also qualify for state rebate programs.
Home improvement spending is anticipated to grow. The Leading Indicator of Remodeling Activity (LIRA) anticipates growth accelerating to the double-digit range in the first quarter of 2011.
