You’ve heard the wisdom of “striking while the iron is hot,” or moving quickly to capitalize on an opportunity.
As you explore franchise opportunities with home renovation companies, you might wish to alter the temperature to “red hot.” After years of fluctuation and uncertainty, the home renovation industry is booming.
Absorb the Forecast
Take it from an impartial—and highly respected—third party: the Leading Indicator of Remodeling Activity, published by the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University. Researchers there say Americans are poised to spend $327 billion on home repairs and improvements in 2017, a $6.7 billion increase over 2016.
This towering number garnered the attention of researchers for good reason: At $317 billion, “the homeowner improvement and repair market will surpass its previous inflation-adjusted peak from 2006,” said Abbe Will, a research analyst at the center.
In other words, 2006 was the last good year for home renovation companies before a major recession hit the U.S. economy at the end of 2007.
Moreover, the home renovation industry is expected to grow at an even healthier clip than the entire U.S. economy in 2017. Economists predict that the U.S. gross domestic product will grow by about 2 percent, although it is still unclear what effect the election of a new U.S. president and his policies will have on business and industry.
Peer behind the Headlines for Other Contributing Factors
While GDP is a leading economic indicator, it’s not the only one driving the home renovation boom forecast. Sometimes, you have to probe beyond the headline, and the reasons add up:
- Home values are expected to rise, albeit moderately. The real estate brokerage Redfin expects median home sale prices to rise by 5.3 percent in 2017, while Zillow is forecasting a more modest increase of 3.2 percent. A healthier real estate market usually encourages people to put their homes up for sale. This is a crucial time for home renovation companies since many homeowners undertake home repairs and improvements to make their properties more “sellable.” Additionally, higher home values often entice homeowners with no plans to move to open a line of credit to help pay for home improvements.
- Employment rates are expected to remain strong. The nation’s unemployment rate is expected to hover at 4.6 percent throughout the first quarter of 2017 and tick up to 4.7 percent in the second quarter. When people have a steady income, they’re more likely to feel confident enough to spend money on their home.
- The amount of disposable personal income is expected to grow, which nicely coincides with a projected increase in consumer spending in 2017.
Remodeling Projects Homeowners Favor
Throughout changing economic situations, Americans’ preference for certain home renovation projects remains unchanged. They know where they will get the greatest return on their investment: the “biggest bang for the buck.” For the last two years, the National Association of Home Builders ranks the 10 most common remodeling projects as:
- Bathroom remodeling
- Kitchen remodeling
- Whole-house remodeling
- Room additions
- Windows/doors replacement
- Basement finishing
- Bathroom additions
- Repairing property damage
The first two projects—bathroom and kitchen remodeling—are overwhelming favorites, with bathrooms being the choice of 81 percent of homeowners and kitchen remodeling favored by 79 percent. TREND Transformations® specializes in both types of projects, which is another reason for you to “strike while the iron is hot” and call for more information on joining the premier home renovation company in the industry.