During the recession, many Americans were unsure of what would come of the declining real estate market. Most just decided to stay put, not make any improvements to their existing homes, and began waiting things out.
Last week, both Lowe’s and Home Depot reported fourth-quarter gains that beat their own estimates to Wall Street as well as analysts’ predictions. Both home improvement stores posted gains of at least seven percent and they also saw the number of sales of expensive purchases go up thirteen percent in the fourth quarter. These include purchases in the $500-$1000 range.
Economists have wondered if raising interest rates would put a damper on the six-year housing recovery. But these numbers show that it appears that they have little to worry about at the moment. Americans are feeling more confident about the economy and the safety of their jobs and wages.
This is good news, as it shows that more Americans are choosing to renovate their existing homes and that proves that they are confident in the recovery. Americans have put off these renovations until recently. Gains in home prices had slowed early in the year but picked up steam in the fourth quarter as 86% of the 175 metropolitan areas measured have increased in value.
As more Americans receive their tax returns these numbers could grow. A survey by the National Association of Home Builders shows that the number of renovations over the next quarter is predicted to be at an all-time high.