Lack Of Housing Inventory

The last graph in this week's series on housing inventory shows the trends in residential remodeling. Since 2004, remodeling has been relatively consistent with the peaks and valleys until early 2011. A significant change in the trend for remodeling in the west and mid-west. I have always concluded that housing trends started in the west and traveled east --- let's see in the near future if the northeast and south will follow the significant upward remodeling trend.

Lowes Home Improvement

 

Home Depot



I am not a stock broker and will not enter the stock market but the two largest home improvement retail companies reflect movement in the remodeling industry. We experienced this same trend in the 1980's recession but mortgage interest rates were 18%. Today, a borrower with a credit score of 640 can get a 3.25% rate!!

Just some thoughts:

1. homeowners are getting their homes ready to sell

2. homeowners have decided to stay put and make cosmetic improvements for enjoyment

3. homeowners are having to make accommodations for other family members moving back in

4. homeowners want to "update" their homes

4. foreclosed homes require remodeling and repair

In my opinion, a significant spike in remodeling is not good for the housing industry!!! This is representative of a "for sale" inventory problem - new and existing homes. We are starting to see multiple offers for homes. This will pressure home prices higher.