Jun 13

Buyers Boost Spending on Remodeling

Buyers Boost Spending on Remodeling

Home buying is good for the economy. Each home purchase triggers significant spending on furnishings, appliances and remodeling.

A recent study from the National Association of REALTORS® estimated that, in 2021, the housing market generated a median of about $113,000 in economic impact per home sale. Read more: How Home Sales Help Local Economies

The National Association of Home Builders recently released a study documenting the economic benefit of a home sale. During the first year after closing on a house, a typical buyer of a newly built single-family detached home spends, on average, $9,250 more than a similar non-moving homeowner. A buyer of an existing single-family detached home tends to spend over $5,240 more than a similar non-moving owner, the NAHB analysis found.

The study finds that buyers of newly built homes spend the most on property alterations and repairs following a move, despite the home being brand-new. “A typical new-home buyer … is estimated to spend almost twice as much on these projects ($9,288) compared to an identical household that stays put in a house they already own,” the NAHB notes on its Eye on Housing blog. Researchers say the extra spending is most common for building outdoor features, like patios, pools, walkways, fences, landscaping and various additions to the new home.

Buyers of new homes also spent considerably more on furnishings following their move. They spent an average of $4,729 on furnishings and $4,138 on appliances following a move.

Buyers of an existing home also tended to spend the most on property alterations and repairs following a move—$7,391. (That is still below the $9,288 that new-home buyers spent.)

“In the case of buying an older home, most of this extra spending goes to property repairs, alterations, and various remodeling projects,” the NAHB notes.

Buyers of existing homes spent $2,988, on average, on furnishings and $2,799 on appliances, also less than purchasers of new-home construction, the study finds.

Source: 

“How a Home Purchase Boosts Consumer Spending,” National Association of Home Builders’ Eye on Housing blog (June 6, 2022)

©National Association of REALTORS® Reprinted with permission

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