Americans Are Pouring Money Into Their Homes Like It's the 1990sBy
Industry took advantage of second-warmest period on record
Gains helped by home improvements, boosting employment
If you’re building or renovating a home in the U.S. these days, you’ve got plenty of company.
Americans’ spending on residential construction projects -- from the pouring of foundations to home improvement -- just hammered out its strongest three-month period since 1994.
Solid job growth, low borrowing costs and a recovery in home equity since the market crash a decade ago are generating momentum. The outsized advance in outlays also has its roots in more than favorable conditions for building across the U.S. After all, the first four months of 2017 were the second-warmest on record, according to the National Oceanic and Atmospheric Administration.
Home sales continue to mount, albeit unevenly, and there are more one-family houses under construction now than at any time since mid-2008.
What’s more, Americans are spending more on home improvements. While a report Thursday from the Commerce Department showed a 2.9 percent drop in April outlays for improvements from the prior month, such spending was still 32.3 percent higher than it was a year ago. That’s the strongest advance since January 2000, as the chart below shows.
A residential remodeling index by Metrostudy reached a record high of 107.3 in the first quarter, up 4.5 percent from a year ago, based on data going back to 2004.
“The current strength of the remodeling market can be attributed primarily to economics -- low mortgage rates, strong existing-home sales, the bull stock market run, good job gains, and now more recently, wage gains,” Mark Boud, chief economist at the provider of real estate research, said in a statement.
All of this new housing activity is driving job gains in the sector. Residential contractor employment has climbed more than 500,000 over the past six years, according to Labor Department data. Since the end of 2015, home-remodeling industry payrolls have outpaced all private employment.