RPT-Fitch: Uptick in U.S. home improvement spending likely in 2014
Oct 4 (Reuters) - (The following statement was released by the rating agency)
Rising optimism among U.S. homeowners may point to moderately higher spending on home renovation projects through 2014, according to Fitch Ratings in a new report.
Fitch is projecting home improvement spending will increase 4% in 2013 and grow 5% next year as the housing market continues its modest recovery. . 'After six years of declining overall returns for remodeling projects, the home improvement industry finally turned the corner and saw an increase in costs recouped from home improvement projects,' said Director Robert Rulla. 'Increasing housing turnover will also provide added impetus for remodeling spending as homeowners prepare their homes for sale and new owners undertake projects to personalize their homes.'
That said, challenges remain for the sector that could derail a sustained rebound in remodeling spending. Unemployment is still high, consumer credit standards continue to be tight and consumer confidence is still weak. Additionally, rising mortgage rates could slow down cash-out refinancing activity, which may perhaps limit homeowners' ability to finance large projects. 'Spending for big-ticket remodeling projects will continue to lag the overall remodeling improvement',' said Rulla. 'That said, homeowners are slowly warming to the idea of undertaking larger discretionary projects and purchases.'
Fitch's latest 'Tale of the "Measuring" Tape' is available at 'www.fitchratings.com' or by clicking on the above link.
Link to Fitch Ratings' Report: The Tale of the â€œMeasuringâ€� Tape (U.S. Home Improvement Industry)