Analysts and building products executives are forecasting that lower interest rates will fuel a remodeling renaissance next year, with increased spending on new kitchens, bathrooms and decks, The Wall Street Journal reports.
After surging during the pandemic when people were stuck at home, spending on home repairs and renovations contracted as high borrowing costs slowed home sales and made it more costly to tap home equity to pay for large projects.
With the Federal Reserve cutting rates, the increased home equity homeowners have amassed is getting cheaper to access.
Spending should reach an annual rate of $477 billion by this time next year, Harvard University’s Joint Center for Housing Studies said last week. That would approach the record annual rate of $487 billion reached a year ago, before high rates took a toll.
