As borrowing costs remain high, Americans are beginning to postpone home improvement plans or look for alternatives, according to data from John Burns.
Yahoo Finance reporter Dani Romero joins Wealth! to break down the latest trends in the housing market and how Americans are finding ways to improve their homes on a budget.
For more expert insights and the latest market trends, click here to watch this full episode of Wealth.
This post Nicholas Jacobino
Video Transcript
Everyone, let's go back to the topic of housing for a moment.
Americans are putting off home improvement plans and opting for more affordable options amid rising borrowing costs and a housing market that has yet to fully recover. This story was covered by Danny Romero for Yahoo Finance.
Look, Danny, Brad, what do we know? It's really expensive now to have a house that needs fixing up.
Consumers are moving away from large scale renovation projects and towards DIY type projects.
Data released by John Burns in April found that consumers are trying to find cheaper alternatives in areas such as cabinets, flooring, lighting fixtures and even look-alike items.
I spoke with a homeowner in Michigan who wanted to replace his shower stall, and the homeowner said it would cost about $1,000 just to replace the shower stall.
As you can see on the screen right now, this was really over budget.
And he also said that all this combination doesn't include labor costs.
So he found some DIY Facebook groups instead and started posting pictures to these Facebook groups, and then a lot of people joined and started giving their suggestions and references and writing comments in those Facebook groups.
So he said, “Wow, I can fix this shower stall for $25. That's way cheaper than what he can afford,” and apparently the homeowner isn't the only one who thinks that way.
According to data from John Burns, 36% of consumers are further postponing projects and 30% are cutting back on spending.
That's from April data, and the reason is that building materials are very expensive right now and labor costs are going up, Brad.
But this slowdown won't last forever.
According to experts, there are two catalysts that can really help this market.
This household wealth industry is doing very well right now and caters to a lot of discretionary spending.
Secondly, experts say 50% of homeowners live in homes that are 40 years old, meaning that eventually these homes will need replacing or interior repairs, which will also help the home renovation market.
Several significant construction projects.
Probably, Danny, thank you so much for taking the time to explain this to me.