Home improvement spending should continue gaining in 2016, Fitch Ratings has stated in a new report. With the economy in the United States continuing to strengthen and home values improving, home improvement spending should increase 4.5% this year, Fitch projected.
The housing market recovery likely will continue through 2016, Fitch asserted, and increased housing turnover should boost home improvement spending.
“Homeowners will typically remodel when buying a home to either fix it up or customize it to their tastes,” said Fitch director Robert Rulla. “Potential home sellers also tend to remodel to prepare their homes for sale.”
Still, headwinds could blow up into impediments to home improvement spending momentum. Higher interest rates could slow refinancing and cash-out activity, while tight construction labor markets could result in higher costs and construction delays. Negative equity overhang also lingers over the housing market and could have an effect on turnover in the marketplace, Fitch maintained.
“Homeowners with little or no equity may underinvest in maintenance and remodeling projects,” Rulla said.