New Year, new home or home improvements? The NAHB forecast is for ongoing gains for single-family construction in 2021, though at a slower growth rate than in 2020. Remodeling will remain strong as people continue to upgrade existing homes.
“2020 was a huge year for home improvements such as window and siding replacement, and 2021 is pacing to be just as strong,” says HBAGC member Trey Moon with Window Works of Chattanooga.
Residential construction will remain a leading element of the recovering economy, as illustrated with recent labor market data: Residential construction added 15,400 net jobs in November and was one of only a few sectors of the economy to post a year-over-year jobs gain (26,000).
The outlook for housing remains positive, as the overall economy is expected to record a solid gain for GDP growth in 2021. NAHB anticipates GDP growth to accelerate in the second half of the year, after a majority of the U.S. population has been vaccinated. This process will be the most important element of 2021, as it will allow hard-hit sectors in the service industries to begin to recover and diminish shutdown risks harming small businesses.
A growing economy will be good for housing, but industry stakeholders should be aware it could also result in higher interest rates that could act as a headwind for more housing growth. Experts suggest now is the time to consider refinancing or getting a home equity loan.
“Mortgage rates are at all time lows. Now is the time to refinance or even consolidate high interest rate loans into low interest rate loans,” says HBAGC member David Smart, President and CEO of Trust Federal Credit Union. “A balance on a credit card with a 20 to 25% interest rate could be converted into a historically low home loan or signature loan.”
Many Chattanoogans found themselves spending more time at home in 2020, fueling housing, home improvement and even secondary residence investments. 2021 will bring a new normal for many, including more remote work opportunities as well as how they live and entertain. This new normal will favorably impact housing and home improvement industries for our area.
To find a qualified, professional remodeler, builder or real estate agent in the Chattanooga area, visit the Home Builder Association of Greater Chattanooga’s online membership directory at HBAGC.net.