Renovation spending faced challenges last year but was able to increase over the course of 2019 and is expected to increase further in 2021. This emerges from a report released Thursday by Harvard University's Joint Center for Housing Studies.
Spending on the maintenance or improvement of condominiums or rentals increased 3.5% to an estimated $ 419 billion in 2020, up from $ 406 billion in 2019; and this year it is projected to grow by at least another 3.3% to $ 433 billion, according to the centre's multi-source analysis.
That growth could be attractive to a mortgage industry that needs to find new sources of credit as refinancing rates and maturities dwindle, said Jim Bopp, vice president, Planet Home Lending.
"The industry is working to bring this product back," he said.
Although some established lenders pulled out of remodeling and home finance over the past year due to the early risks and constraints of the pandemic, many have since returned to the market.
Bopp is bullish on the outlook for this year as borrowers' demand for finance to repair their own homes or buy fixer uppers could accelerate as vaccines roll out and consumers with the shortage of items for sale Houses in good condition are faced.
Currently, projections for spending growth to date in 2021 may not be quite as high as 2020, as the impact of the coronavirus has limited the number of borrowers in lower-income tiers that are eligible or interested in renovation funding .
As of the end of 2020, more than 22% of those in the under $ 25,000 income bracket and 16% of those making $ 25,000 to $ 50,000 a year were behind on standard mortgage payments.
However, with the introduction of vaccines and the recovery of the economy, these barriers could be removed.