Chicago, IL (PRWEB) October 26, 2013
The Federal Savings Bank informs readers that more homeowners able to get low mortgage refinance rates and higher property values, remodeling activity has surged in 2013. According to the latest Remodeling Market Index by the National Association of Home Builders, remodeling has climbed to its highest rating since 2004. Rising two points in the third quarter of 2013, the index reached a rating of 57, indicating market activity has increased.
The Remodeling Market Index takes an average of current and future remodeling activity in the housing market. Without considering future market conditions, the current remodel rate increased from 54 points in the second quarter to 58 in the third. Current conditions reached the highest level since the initiation of the index in 2001. Any score above 50 on the index is an indicator that more remodelers are increasing market activity.
Improved economic conditions have provided encouraging signs for homeowners who plan to remodel. The Remodeling Market Index report comes at the same time as interest rates fell to an average of 4.13 percent for a 30-year fixed mortgage, down from the previous week's average of 4.28 percent, Freddie Mac reported. With housing conditions looking better, projects that were put on hold during the recession are coming to fruition.
Home sales and price gains have given a major advantage to homeowners who have seen the value of their properties increase over the last year. Heading into the winter months, when sales typically dwindle, prices are expected to rise, though at a slightly lower rate. According to the latest Home Price Index by the Federal Housing Finance Agency, prices increased 0.3 percent in August, the 19th consecutive month of growth in the housing market. With higher home equity and low cost mortgages, homeowners feel more confident about remodeling.
"In addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefited from rising home values," said David Crowe, NAHB Chief Economist. "This boosts home equity that owners can tap to finance remodeling projects. We expect existing home sales and house prices to increase, but at a slower rate over the next year, so the demand for remodeling services should also increase, but more gradually over that period."