Home renovation declines in wake of COVID-19
As COVID-19 cases continued to climb in April, the housing market felt the strain of the pandemic. Prior to the outbreak, Buildfax, a property condition data service provider, reported demand for new homes was so high that a major housing shortage was imminent.
However, April saw a 7.37% month-to-month decrease in single-family authorizations as COVID-19 continued to spread. Contrary to the month-to-month trend, data shows a 1.2% year-over-year increase in single-family authorizations, which Buildfax states is likely due to construction being an essential business in the majority of the country.
Those numbers reveal a stark difference from March, when authorizations increased 6.62% compared to the previous year, according to a Buildfax report. The report equated the rise to pre-pandemic behaviors prior to stay-at-home orders.
But it’s not just construction authorizations being hit. Existing housing activity took a nosedive in April when maintenance volume and spend slid 29.09% and 29.71% year-over-year, respectively. The remodel volume – a subset of maintenance that includes renovations, additions and alterations – decreased 33.83%.
While maintenance and remodeling numbers are typically viewed from a more regional or localized lens, existing housing spend continued to drop in the majority of major metros, according to the report. Sharp declines like these were most likely spurred by the growing unemployment rates coupled with a downturn in home sales.
Looking ahead, Buildfax estimates a strong revival in home sale activity as the economy begins to open back up. This prediction mirrors the forecasts by economists that a record-setting recession followed by an end-of-year turnaround is on the horizon.
“By and large, property transactions have slowed substantially, which subsequently affects the pace of maintenance and remodeling,” Buildfax Managing Director Jonathan Kanarek said. “On the bright side, we anticipate maintenance and remodeling to rebound as the number of home sales starts increasing later this year.”
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