As the housing market continued its recovery over the last several years, home prices have risen and home maintenance and remodeling spends have risen with it.
But after a solid five-year run, it appears things are cooling off – and fast.
It’s a strong sign that the economy is slowing down, just as many analysts have predicted. But the quick change of pace may mean that it’s slowing faster than expected.
Homeowners and investors are pulling back on their housing-related spends, as the number of construction permits, home maintenance activity and remodeling expenditures all declined in March for the fifth consecutive month.
According to a recent report by BuildFax, a property condition data service provider, singly-family housing authorizations – which represent building permits requesting permission to commence construction – are down 8.4% from last year.
At the same time, home maintenance and remodeling activity is backsliding.
BuildFax data shows that maintenance volume decreased 5.07% from last year while spending remained flat, and remodeling volume declined 9.76% from last year as expenditures in this category dropped 10.07%.
“March numbers mirror an assessment from the Federal Reserve as Fed Chairman Jerome Powell warned the economy is slowing faster than expected,” BuildFax stated in its report.
BuildFax COO Jonathan Kanarek said the fact that the expectation that the Fed will not increase rates in 2019 may help alleviate some of the pressure.
“The downward trend in housing activity has led to increased focus on the sector. In March, the Fed signaled no additional rate increases in 2019, which could boost investment in the housing market,” Kanarek said. “We may see some relief across maintenance and remodeling indicators, as home sales typically facilitate investment into the existing housing stock.”