Dive Brief:
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Remodelers: If flat sales and the occasional gloomy forecast have you believing homeowners just aren’t that into you, a trip to Lowe’s or Home Depot will probably cheer you up.
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You’ll find homeowners lining up to pay for big purchases, a sign that they’re in the mood for home improvements—either because they’re getting ready to plant for-sale signs in their yards or because they’re feeling confident about their jobs, incomes, and the economy and are willing to spend to spruce up their houses. Bloomberg reported that the number of purchases totaling more than $900 increased by 10% at Home Depot last quarter, and sales of more than $500 were up by 13% at Lowe’s.
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“Consumers are feeling better about their jobs, their wages and certainly feeling better about the value of their home,” Lowe’s Chief Executive Officer Robert Niblock told Bloomberg. “They are re-engaging in projects that they have put off.”
Dive Insight:
When home values rise, owners tend to spend more money on those homes. Although single-family home prices rose at a slower-than-skyrocketing pace in 2014, the median price of a new home in January was $294,300, up from $218,000 a year ago. That increase was largely due to a lack of inventory, which typically pushes values upward. For existing homes, the median price rose last year across 86% of the country, the National Association of Realtors reported earlier this month.
“That’s certainly good for their willingness to spend on the home,” said Niblock, who noted that more than anything else, rising prices of existing homes boost sales at Lowe’s.
And it’s already helping remodelers: Home-improvement pros told the National Association of Home Builders that contracts for upcoming work are at a record high.