With unemployment at an 11-year low and consumer confidence up, many Americans have more disposable cash than they’ve had in a decade. And for the past two years, many of us have been spending it on our living spaces. According to the Leading Indicator of Remodeling Activity, home improvement and remodeling investment have been consistently on the rise, and expenditures are expected to remain strong going into 2019. According to data from the LIRA, which is run by Harvard University’s Joint Center for Housing Studies, money spent on these upgrades and repairs is likely to top a whopping $340 billion by April of next year.
Nationwide, real-estate values are on the uptick, especially in booming urban areas, and the economy at large is strong. Certainly, the current administration inherited a situation on the upswing. But falling unemployment and wage growth have boosted consumer confidence as well as the stock market, if mainly for the rich, and Trump’s corporate tax-rate cut will put more money in the coffers of corporations (though some disagree that it will be effective in the long run). Meanwhile, the repeal of legislation such as the Volcker Rule, along with the general unfurling of the Dodd-Frank Act, will give banks more leeway – and assurance – to lend and take risks.
That partially explains why people have money in their pockets, but why has the spending turned toward shelter?
While non-residential construction grew by just 0.6 percent in 2017, the residential sector shot up by 10.6 points. Despite the stable economy, politically and culturally, things are going a bit – to use the technical term – bananas. And that unrest may be what’s prompting Americans to invest in our homes.
“In an unstable and uncertain time, investing in real estate and property can feel like a safe thing to do,” says Thomas Fisher, a professor of architecture and director of the Minnesota Design Center at the University of Minnesota. It’s not always the most reliable bet (location and other factors matter, of course), points out Fisher – who has also published two books on architecture and ethics, with a third due out later this year – but nesting may feel risk-averse amid all of the turmoil.
Protesters hold banners during the Women’s March on Portland in Portland, Oregon, one of several protests held since Donald Trump’s election.