- 1 of 1 Photos | View More Photos
It's a strategy as old as home-owning itself: Buy a house at a lower price, then kick in the time and money to make it what you want. According to new spending data projected for the next year or so, homeowners are spending almost twice as much as they have in previous years on renovations and repairs. Put simply: The fixer-upper is alive and well.
Billions in upgrades
CNBC reports home improvement and repaid expenditures to hit 8 percent in 2017, well above the historical average of 4.9 percent. The numbers come from a new report from Harvard's Joint Center for Housing.
"By the middle of next year, the national remodeling market should be very close to a full recovery from its worst downturn on record," Abbe Will, research analyst in the remodeling futures program at the Joint Center, told CNBC. "Annual spending is set to reach $321 billion by then, which after adjusting for inflation is just shy of the previous peak set in 2006 before the housing crash."
Equity is trending up
The report notes home equity is a major factor in the increase, buoyed by near-record low mortgage rates, which are wooing owners to pull cash out and refinance their properties. The data shows that in the first quarter of 2016, homeowners gained a collective $260 billion in additional home equity. By factoring in that increase, 38 million borrowers now have at least 20 percent equity in their homes, according to Black Knight Financial Services. Brad Hunter, chief economist with HomeAdvisor, an online home services marketplace, said confidence is another factor.
As usual, bathrooms and kitchens are the most popular
Though spending is up, the most popular renovations remain as expected: Bathrooms and kitchens. But, insulation work is reportedly yielding the best returns, and more ambitious multiom remodels are up almost 70 percent compared to last year.
CNBC points to a report from Houzz, which notes at least one-quarter of remodeling firms across all sectors report seeing more clients taking on multiple projects at the same time.