Tight Economy Hurts Homeowner Remodeling Plans
- Feb 11, 2008
San Francisco–Two out of three homeowners said they would hold off on a planned home improvement this year until the market improves, according to a recent survey by the San Francisco-based Zoomerang research firm.An additional 11 percent said they would scrap the renovation altogether in 2008, USA Today reported Monday. The e-mail survey included results from 2,100 homeowners in 11 metro areas.Lower property values are making it difficult for homeowners to refinance and use cash from their home to renovate. In addition, lower home prices can knock down the amount of money a home renovation can add to a property.Sales for the $280 billion remodeling industry are predicted to show a 2.6 percent annual rate of decline through fall, the Joint Center for Housing Studies says. Last year, homeowners took just $38 billion out of their homes in the fourth quarter–half the amount for the fourth quarter of 2006, according to Freddie Mac.However, the recent interest rate reductions may help homeowners pay for renovation projects. Remodeling contractor database ServiceMagic.com traffic was down in January but increased 10 percent after the Federal Reserve cut rates, USA Today said.