Rising Home Purchases Means Bigger Spending on Remodeling, Appliances and Furnishings

 According to the data found in the Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics (BLS), the National Association of Home Builders says that new home buyers and existing home buyers spend thousands of dollars or more on in the first year of owning a home on appliances, furnishings and remodeling. This estimate is derived from the pre-pandemic (2017 - 2019) data collected.

NAHB's report found that during the first year after the purchase of a new construction home, a homeowner will spend on average over $9,250 on their home over a non-moving home owner, and those that purchased an existing home spent around $5,240 over non-moving homeowners. This shows that a home purchase causes an increase in spending. These expenditures are mostly on things like appliances, furnishings, and remodeling.

New home buyers also spend a lot more on property alterations and repairs.  A typical new home buyer is estimated to spend almost twice as much on these projects ($9,288) compared to a similar household that stays put in a house they already own. When looking closer, the study showed that these expenses were from building outdoor features such as a pool, patio, fences, and landscaping.

When someone moves into a new home, they also want to have some new furnishings. This also triggers bigger spending. It is estimated that a new home buyer spends around $3,000 or more on furnishings during the first year of owning a home and $1,870 on appliances.

If a new home buyer purchases an older home, this price can go up even more. It is estimated that they tend to spend around $5,238 more on remodeling, furnishings and appliances. The majority of the spending is on property repairs, alterations and remodeling projects. Homeowners that do not move will spend around $4,282 in a year on home projects while those that buy existing homes will spend around $7,400 during the first year after closing. The data shows that home buying does spark additional spending.

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Private Residential Construction Spending Still on the Rise

Decreasing mortgage rates along with solid growth of spending on single-family construction and remodeling have kept the private residential construction up for the sixth consecutive month. According to the National Association of Home Builders, the Census Constructions Spending data reveal a 1.4% increase to a seasonally adjusted annual rate of $540.7 billion for total private residential construction spending this last December.

The National Association of Home Builders provides a monthly estimate of the total dollar value of construction work done called The Value of Construction Put in Place Survey (VIP). On the first day of each month data collection and estimation activities begin for the month. The data that is recorded includes the cost of labor and materials, cost of architectural and engineering work, overhead costs,

interest and taxes paid during construction, and contractor’s profits. The survey is based on construction work that is done each month on improvements to existing structures or new structures for private and public sectors.

The growth in spending on single-family construction and remodeling has been great for the housing industry. Single-family spending was up 2.7% in December 2019 at an annual pace of $289.3 billion. This was 5.2% higher compared to the figures reported in December 2018. The figures included in the private residential improvements were based on spending on remodeling, major replacements, and additions to owner-occupied housing units. In December the figures rose to a seasonally adjusted annual rate of $193.7 billion.

In the second half of 2019, as seen in the graph, there has been solid growth in single-family construction and home improvement. Also shown is new multifamily construction spending which slowed down since last summer but did see solid growth from 2010 to 2016 and a growth spurt from late 2018 to early 2019.

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Increase in Private Residential Construction Spending

Private residential construction spending is spending on construction by private parties and homeowners.  Data about this construction spending is collected from retail and wholesale outlets nationally. It seems that homeowners and small builders have a positive outlook on the economy and are spening money on new home construction on their own land or lot, as well as additions and remodeling to existing homes that they own.  Many people buy land and hold it for awhile before they decide to build a new home.  By owning land, there is an opportunity for new home builders to be able to more easily qualify for a construction loan by utilizing the equity in the land.

In addition to new home construction, homeowners are improving their homes as well, by contracting popular remodeling projects, such as kitchen, master bath, and outdoor area remodels.  Additions of pool houses, mother-in-law suites, and over-the-garage apartments are also popular construction projects for existing homeowners, which contribute money to the total amount of private construction spending during the month of July.

The National Association of Home Builders (NAHB) did an analysis of the Census Construction Spending, and the data showed an increase of private residential construction spending of .8% in July over June, 2017, to an amount of $523.1 billion.  This increase was also an 11.6% increase year-over-year compared to 2016, and it was the third consecutive monthly increase for private construction spending after it went down slightly in April, 2017.

The breakdown in construction spending between single-family home construction and home improvement of existing homes shows that new home construction went up by .8% compared to June to reach $264.1 billion, and $192.4 billion was spent on home remodeling or renovation, which was a 1.41% increase month-over-month.  Also remodeling / renovation spending was up a total of 16.5% year-over-year compared to July, 2016.

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Trends That Are Showing Up in Remodeled or Newly Built New Homes

Whatever type of home construction you are planning – a new, custom home or a complete remodel / renovation of your existing home – you will want to pay attention to the trends that are showing up in remodeled or newly built new homes.  Below are several trends that are popular among contractors, builders, and homeowners.

1. Luxurious garden tubs or jetted garden tubs have held steady in home construction for years, but for 2016, the trend is shower stalls or walk-around showers with shelving and seating.  There are some really unique shower designs that include multiple shower heads and even massage sprays.

2. For your backsplash, trim, or even walls and floors, ceramic tile is not as popular now among renovators and builders as glass tile.  The glass tile comes in many different colors as well as designs with multiple colors, so choose your matching design and go crazy!

3.  When stepping up to the gourmet kitchen or luxurious master bath, granite countertops used to be the ultimate material that reflected the type of construction of your new home or remodel.  There is a new material that is called engineered quartz that is not only tougher than granite and lasts longer, but it has the same timeless, classic, and upscale design for your custom counter work.

4.  Toilets naturally came in lower to the floor sizes for decades, but now there are choices of toilet heights that are available to new home buyers, and buyers are choosing height over flow.  The new, higher toilets are also more water efficient and modern, saving some homeowners on utility bills.

5.  Along with ornate, custom-built, real wood cabinetry; home buyers and remodelers now have a choice of painted, stained, and dark wood cabinetry vs. the traditional oak cabinets that were standard for new home construction projects.  Choose and contrast these colors as well with a two-toned look in the kitchen or bathroom.

6.  Even though, we as a custom home builder still encourage you to buy reliable appliances throughout your home, the industry has caught up with technology, so some home buyers and home renovators are now going with a mid-range level of appliance vs. a high-end appliance package.  The appliances themselves seem to have the same duration of service, and you can also purchase upper end looking fixtures, such as stainless steel to achieve the look you want without all of the cost.

7.  Back to the basics – homeowner and savvy new home buyers know to renovate and build their homes with real wood flooring such as solid oak or pine instead of engineered flooring.  While the look and cost of an engineered floor is great for the first few years, the results after many years of wear and tear don’t stand the test of time, weather, and constant use.  Homeowners and new home buyers will be looking to find affordable real wood choices for their flooring.

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Bathroom Remodeling – Available in All Project Sizes

Remodeling a guest bathroom or master bathroom can change the entire look and usage of the room.  It can also change the functionality of the bathroom itself as well as the resale value of the house  Bathroom remodeling is one of the most popular choices of renovation projects that homeowners choose.  Nationally, today’s average price to remodel a bathroom ranges from $5,000 – $15,000, and some people spend as much as $20,000 on a bathroom remodel to create an oasis or paradise right inside their own home.

Whatever price you are able or willing to pay to transform your bathroom into a fully restored new room, there are many considerations of materials and projects to consider when beginning your renovation project.  One of the big considerations is to repair and refinish vs. replace the fixtures in your bathroom.  Fixtures can include lighting fixtures, plumbing fixtures, and carpentry fixtures such as cabinets and countertops.  If you need to stay within a tight budget, you might consider replacing faucets and sinks and then stripping and refinishing cabinets vs. tearing out and replacing the entire cabinet.  If you have a more flexible budget, and you decide to tear out and replace; you may also want to consider changing the floorplan of the bathroom to expand it and add new appliances such as a massage shower or a spa bathtub.

Increasing or changing a floorplan may take more time because you are getting into structural integrity as well as plumbing and electrical new systems or reconfiguration, so you will want to make sure that you budget your money and time accordingly. If you decide to increase your floorplan, make sure you used an Experienced Contractor who can help you make great use of all of your space and also make your new bathroom remodel as inviting and useful as possible.

If you are somewhere in between “sky’s the limit” and a limited budget, you may decide to replace old tubs and showers, tear out and replace bathroom cabinetry, and create an entirely new lighting package.  Depending on the scope of the project, this may cost you somewhere in the “middle” range of an average bathroom budget, but you will be surprised how just doing those minimal “invasive” tear-outs will transform your bathroom into looking brand new.

Ron Lee Homes Remodeling has a terrific team that is excellent about making recommendations that will fit within your job scope and budget to make your bathroom remodel the perfect renovation for your life.  We listen to our clients’ needs and then try to “squeeze the budget” as much as possible to exceed your expectations.  Working with a builder also has its advantages as we know how to get “in and out” of your home as fast as possible with as minimal mess, noise, and hassle of living with a remodel while it is happening.  Contact Ron Lee Homes Remodeling today to get a quote on your project.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.

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Remodels & Renovations - A New Service Offered by Ron Lee Homes

Ron Lee Homes, a new home and custom home builder in St. Tammany Parish is now offering renovations, remodeling, and additions as a new division of the company.  Cheryl Murphy, formally of Floor to Ceiling in Mandeville, Louisiana, heads the division as the expert consultant and project manager for all renovation and remodeling projects.  Ron Lee Homes Remodeling will focus mainly on Kitchen, Bath, Master Bedroom / Bathroom, Outdoor Spaces, and Additions.  Also, Interior Design Services are offered either separate from or in conjunction with a completed remodeling project.

Kitchens
The kitchen is the main area in which a family or house members congregate to prepare food and also socialize either on a day-to-day basis or because of a family gathering or social event.  The kitchen has been called the “heart of the home” because of its central purpose and location.  Many homes built in the Greater New Orleans area are 10 – 50 years old and therefore have outdated appliances, cabinetry, countertops, and fixtures.  Ron Lee Homes Remodeling will help you every step of the way in deciding the best, most efficient, and cost effective way to enhance your kitchen’s appearance with a complete kitchen remodel.
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Bathrooms
As one of the most important functioning parts of the home, the bathroom is essential to every day life and gets a lot of use.  If you own an older home, your bathroom fixtures and even plumbing may be very outdated or not fully operational.  Or, you may be stuck with an old color scheme, wallpaper, or certain colored sink or bathtub that doesn’t suit your creative palette anymore.  Whatever your reason, Ron Lee Homes Remodeling can take your old, outdated-looking bathroom and renovate it to be a sparkling new and modern looking room of your home of which you can be proud.
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Master Bedroom / Bathroom
It might have been some time ago when you moved into your new home.  At that time, you may have had to make do with your existing furniture and furnishings, so your Master Bedroom was perfect for your life “just starting out.”  However, if you have been successful in life and business, there may be a need to upgrade your home’s appearance and space by remodeling your Master Bedroom and Bathroom.  With Ron Lee Homes Remodeling, we can make suggestions on how you could be able to “steal” space from one to enhance the other.  Completely renovating your master suite to make it your own private “getaway” inside your home is just one of the services offered by Cheryl Murphy.  Upon completion, she can also help with Interior Decorating to make your suite not only classically beautiful but open and spacious as well.
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Outdoor Spaces
Have you ever dreamed of having the perfect backyard – an outdoor environment that was multi-layered with the perfect mixture of nature and modern conveniences?  Ron Lee Home Remodeling has extensively built new, CUSTOM homes with amazing outdoor spaces which include outdoor fireplaces, fully bricked patios, covered patios with ceiling fans and beadboard ceilings, custom sound systems and electrical systems for outdoor stereos and flat screened televisions, custom outdoor kitchens with built-in gas grills, and much more!  If you are interested in creating “paradise” in your own backyard, look no further than Ron Lee Homes Remodeling.
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Additions
When initially buying or building your dream home, you may have chosen your home specifically for its location – on or near the water, located in historic Mandeville or Covington, situated on acreage, or your other family members live nearby.  For these and many other reasons, you may not want to move from the area in which you live, but you are “outgrowing” your home and need more room.  Ron Lee Homes Remodeling can help you add additional square footage to your home, whether you are “going out the back,” adding an entire second floor, putting in a mother-in-law suite, or adding an apartment over your garage, we can guide you through each step of the process to get you the space that you need.
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Five Remodel Ideas That Will Enhance the Value of Your Home

How do you remodel with a tight budget when it comes to home improvement? Need to find ways to stretch the dollar when it comes to your remodeling plans? Here are five remodel ideas that will enhance the value of your home.
First and foremost, we start with the heart of the home – the kitchen. Whether you are remodeling for your personal enjoyment or for the resale of your home, it is best to keep a happy medium in your design ideas – unless you never plan on selling your home. A good way to keep remodeling costs down is to use your existing kitchen layout. A little makeover on countertops and cabinets can go a long way. Re-facing your existing cabinets can refresh the overall look of your kitchen. If your cabinets are just too old or not worth keeping, go with ready-to-assemble cabinets which cost half of what new custom cabinets will run you. Countertops can also eat up your budget. Using two different surfaces in your kitchen can keep the cost low. A good way to do this is to use a solid surface on your countertops while using butcher block on your island top. A great benefit for you as the homeowner as well as a potential buyer (if you are looking to sell) is to add Energy Star® appliances. This will not only help with the aesthetic look of the kitchen, but it will also lower your utility bills.

Second, you can never go wrong with adding more square footage to your living space. This will increase your home’s value as well as the quality of your living space. When adding living space, keep in mind the cost can add up. You will need to think about the cost of removing existing walls, moving / adding electric and or plumbing, adding to your foundation, adding a new roof, adding windows, and adding new exterior siding. A word to the wise, a successful addition looks like part of the original structure. Keep this in mind when planning the location, choosing materials, and adding to the existing roof line.

The third thing on the list is curb appeal. First impressions go a long way. The first thing anyone sees is your home’s exterior. There are many solutions to creating a great look for both your home’s exterior and landscape. Make sure your yard is clean and neat by cleaning out overgrown plants, bushes and trees. Painting your home’s exterior can update your home’s look by giving it a nice facelift. If the budget does not allow for a new paint job, a good pressure wash to your siding will dramatically change the outside appearance of your home. To take it one step further, you can add a new entry door, change out old windows, add a front porch, or add dormers which will give your front elevation a new look without completely renovating the whole exterior.

Fourth but oh so important, is the master suite. Anyone buying a home will tell you that their sleeping quarters are very important. If you already have a master bedroom, an update will boost its appearance, making it a more inviting space to spend time in. By doing a few simple things such as painting, replacing the flooring, adding new accessories, and changing the lighting you can create a whole new look to your master bedroom. However, be careful with the choice of paint colors. Muted but distinct colors fit best in a master bedroom for resale purposes. If you do not have a master suite, consider adding one. Things to contemplate when adding a master suite are the location of your new room, if you would like a sitting area, window and door placements, what kind of ceiling you would like, and your lighting.

The last remodel area is where we spend a great deal of time – the bathroom. If your budget is a concern, the focus should go to the powder room and master bathroom remodel first. Stick to the old floorplan. Removing walls, moving bathtubs, sinks and toilets can be a huge cost. Go for cosmetic changes. New paint, new plumbing fixtures, new tile and lighting can enhance your existing bathroom. A great way to stretch your dollar is to use a flat mirror with two lighted sconces instead of a mirrored cabinet with a row of lights. Use plain simple white tile in your shower with a glass colored border which gives it an updated look without spending huge bucks. Regarding paint, this is one area where big, bold colors are a great way to make a huge impact.

If you are considering remodeling your home in St. Tammany Parish, Ron Lee Homes now offers a complete remodeling service.  Contact Ron Lee Homes today to learn more about our remodeling process.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.

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