The Expert Podcast

• The home construction market has gone through major ups and downs, particularly in remodeling and new builds. For the past two years, remodeling and construction saw a spike due to the pandemic and low-interest rates, but that phase is ending as interest rates rise.
• Why the Remodeling Boom May Return:
  • Homes typically go through major renovations when they hit 30-40 years old.
  • Homes from the 1980s are now reaching this age, and major upgrades are needed, including roof replacements, new siding, and updated floor plans.
• What Does This Mean for Builders?
  • Expect a big demand for remodels in the coming years, especially for homes that are now 30-40 years old.
  • Builders should prepare for these projects, even if the market is affected by high-interest rates and higher costs.
• Residential Remodeling Market:
  • 24 million homes are in need of repairs or upgrades, with a large portion being 30-40 years old, the prime time for major renovations.
  • Remodeling is less complex than building a new home, which makes it an attractive option for builders to consider more of these projects.
• Impact of Interest Rates:
  • The rise in interest rates is making borrowing more expensive, but many homeowners will choose to remodel instead of buying a new home, especially if they’re locked into lower mortgage rates (around 4%).
• Challenges for Remodeling:
  • While demand for remodels increases, homeowners are also becoming more price-sensitive due to the rising costs of materials, labor, and construction.
  • Sticker shock is hitting homeowners, as remodeling costs have surged compared to previous years.
• Housing Market Trends:
  • Housing turnover is expected to slow, with more people staying in their current homes due to low mortgage rates. Many homeowners will opt to remodel their existing homes instead of buying new ones, further driving the remodeling market.
• Labor and Material Shortages:
  • Builders are facing challenges finding skilled labor, with some even offering $80-$100 an hour, but still struggling to find qualified workers.
  • Although material shortages have eased, some large structural materials may still face backlogs.
• The Future of Home Remodeling:
  • Builders need to adjust to this growing demand by refining processes and ensuring they have the workforce and materials to meet the needs of homeowners looking to upgrade or expand their homes.