Homeowners Undeterred by Rising Costs for Remodeling – Industry Outlook

By May 9, 2022Industry Outlook

Homeowners Undeterred by Rising Costs for Remodeling – According to a new Nationwide survey of 1,000 homeowners, seventy-one percent of homeowners who have upcoming house projects say they expect to proceed with them despite forty-year-high inflation, increased costs, delayed timelines, limited availability of materials, and supply chain challenges.

The majority of renovating homeowners surveyed say they are focused on repairing the wear and tear of their homes and are taking on house projects to make their homes more enjoyable. Forty-nine percent of homeowners say they want to change something that is outdated in their homes.

“Most homeowners who completed major remodels in 2021 faced significant obstacles brought on by supply chain and inflation issues, such as higher material and labor costs, delayed timelines, and limited material availability,” says Cathy Allocco, vice president of small commercial sales and distribution at Nationwide. “What’s most surprising, though, is these hurdles are not impacting their future remodeling plans with seven in ten homeowners saying they’ll proceed with their remodeling plans in 2022 anyway, but they’re looking for new ways to work with contractors to save on prices.”

While most homeowners are concerned, only 5% of homeowners say that such challenges would halt their projects.

Source: “Survey: Homeowners’ Remodeling Plans Undeterred by Increased Costs, Delayed Timelines,” Nationwide (March 23, 2022)

Sixty-five percent of Buyers Would Make Offer Within 3 Days – Based on Bank of America’s new 2022 Homebuyer Insights Report, homebuyers realize they need to be quick with their offers in today’s competitive housing market. Sixty-five percent of buyers recently surveyed said they would make an offer within three days of viewing it, while 20% say they would make an offer immediately.

Homes spent an average of 17 days on the market in March. Eighty-seven percent of homes sold in March were on the market for less than a month, according to National Association of REALTORS® data.

Homebuyers also are showing a willingness to compromise to move toward homeownership. Common compromises include moving to up-and-coming neighborhoods, buying a home further from entertainment, restaurants, and shopping, buying a smaller home, or forgoing outdoor space.

Source: “2022 Homebuyer Insights Report,” Bank of America

Demand Doubles for ARMs – According to a recent report from the Mortgage Bankers Association, the share of mortgage applications with adjustable-rate mortgages doubled recently when compared to just three months ago.

“As buyers continue to navigate today’s housing market and rising interest rates, many are considering adjustable-rate mortgages,” says Glenn Brunker, president of Ally Home. “ARMs can help buyers save money over a fixed rate because they often offer a lower monthly mortgage payment for the initial period of the loan, typically 5, 7, or 10 years.”

When determining whether to choose a fixed or ARM mortgage, borrowers will want to make two main considerations, Brunker says: How long they will be in the home and their personal finances and affordability. “The interest rate on a fixed-rate mortgage is locked in for the life of the loan—whether it’s 15, 20, or 30 years,” he says. “So, if a buyer is planning to stay in their home for an extended period of time, the peace of mind that comes with a fixed-rate mortgage is beneficial.”

Source: “Adjustable-Rate Mortgage Demand Doubles as Interest Rates Hit the Highest Since 2009,” CNBC (April 27, 2022) and Ally Home

Forty-three percent of Sellers Expect Offers Above Asking Price – Based on Clever Real Estate’s recent survey of 1,000 homeowners, most homeowners believe if they sell now, they should get top dollar, and beyond, for their home.

About 43% of sellers recently surveyed say they expect their home to sell over the asking price. Twenty-eight percent of sellers expect to receive an offer on the first day the home is listed, while fifty-three percent anticipate an offer within a month.

In a separate survey conducted recently by the real estate referral site HomeLight, approximately half of home sellers surveyed said they expected to retain 30% or more of the sale price of their homes. Eighty-seven percent of sellers surveyed also expected to receive more than one offer on their home. Fifty-two percent expect to receive four or more offers.

Source: “Role of the REALTOR® in 2022: Expectations and Misconceptions,” Clever Real Estate (April 18, 2022)

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