Experts project weaker home sales trends will contribute to a sharp slowing in the home improvement and remodeling market, the Washington Post reports. A recent report from the Joint Center for Housing Studies of Harvard University forecast spending by homeowners for renovations will drop to an annual growth rate of 0.4% by the second quarter of 2020 from a projected 6.3% in the third of 2019. A weaker market for home sales may contribute to this significant projected slowdown.
Sales of already occupied homes were down 2.2% in June from a year earlier, according to the National Association of Realtors. Many homeowners fix up or renovate their homes either before they sell or soon after they buy a home.
On Friday, the government reported that the second quarter GDP rose at an annual rate of 2.1%, a sharp slowing from 3.1% in the first quarter. GDP figures show spending on housing—including building new homes and remodeling existing ones—has fallen since the first quarter of 2018.
Home sales have been falling because of a lack of available houses and apartments; many homes that were foreclosed during and after the Great Recession were bought by investors and turned into rental properties, taking them off the market. Meanwhile, prices for many homes haven’t returned to pre-recession levels, discouraging owners from selling.
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