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6 THE RISE OF REMODELING Homeowners are spending more and more on remodeling, according to a recent report from BuildFax. e BuildFax Housing Health Report found that the rate of remodeling spending increased by 16.57 percent year-over-year, despite a drop in remodel volume by 4.21 percent in that same time. BuildFax notes that the increased spending and decreased volume may be due to homeowners feeling "locked in" to their homes, hesitant to re-enter the housing market. "Home prices are outpacing wage growth substantially," said BuildFax CEO Holly Tachovsky. "ese affordability concerns are compounded by mounting mortgage rates and rising construction costs. As a result, homeowners, unable to re-enter the housing market, are reinvesting in their existing properties. e increase in remodel spend suggests the scope of these projects has risen, despite seeing a dip in remodel volume. Homeowners may feel unprepared to enter the housing market, but they are making larger investments in the health of their existing property." Rocky Stubbs, SVP, Direct Lending, Flagstar Bank, also notes the increased amount of homeowners staying put rather than moving out, increasing remodeling spending. "We're entering the most challenging part of the cycle," Stubbs said. "Some first-time homebuyers may no longer qualify. And existing homeowners looking to upgrade but have locked into low rates now have the incentive to stay put and remodel rather than trade up." Additionally, the report found that maintenance volume has decreased year- over-year as well, down by 0.41 percent. is may be due in part to the drop in rebuilding following a spike after last year's hurricane season. For example, Florida saw a 7.83 percent decline in maintenance volume year- over-year, after maintenance volume jumped following Hurricane Irma. Another finding in the report was an increase in Accessory Dwelling Units (ADU). BuildFax found that ADU construction activity has increased substantially in California, Oregon, and Washington. California shows the continued highest volume of ADU construction activity with a year-to-date increase of 53.7 percent. CHASING THE AMERICAN DREAM e fixer-upper culture is gaining traction among millennial homebuyers given the affordability of these homes as an initial purchase. However, it is interesting to note that many young Americans rely heavily on online platforms for inspiration. "Pins & Properties: Chasing Your Dream Home," a report put together by Chase Home Lending and Pinterest, reveals that millennials are the largest group of homebuyers today. Nearly two-thirds of millennials consider homebuying a goal they are determined to reach in their lives and 70 percent consider it the best long- term investment. Nearly 95 percent of the millennials said they planned some kind of renovation in the next three years. "For the second year in a row, millennials make up the largest group of homebuyers, seeing the value of this smart investment," said Amy Bonitatibus, Chief Marketing and Communications Officer for Chase Home Lending. As most first time homebuyers do not have the income to afford their dream home right away, they purchase starter homes and make substantial upgrades eventually. Eighty-seven percent millennials are planning some kind of renovation and 68 percent intend to spend at least $20,000 on renovation projects. Seventy-five percent plan to finance home renovation projects by tapping the equity in their homes, the report found. Millennials are paying close attention to smaller and affordable renovation and ideas. Logistics and affordability are key factors for many who are preparing for a growing family. Jon Kaplan, Global Head of Partnerships, Pinterest, said, "Chase and Pinterest have similar missions in helping people make their dreams a reality. e partnership between our companies on the Chase Dream Boards visual interactive experience demonstrates the way in which we're able to offer personalized recommendations that deliver unique value and guidance to potential home renovators." e report noted that pinners continue to prioritize DIY projects at home for decor and personalization, setting up a gym or laying bathroom countertops. Millennial homeowners also ranked 'new landscaping' as their top choice for renovation space. Projects like a closet overhaul are increasing over 7,000 percent in year-over-year search results. Pinterest said that it has experienced an increase in searches for 'gold bar carts' by 300 percent since 2017. ose looking to remodel outdoor areas were found 1.7 times as likely to search for backyard party ideas. Interestingly, these Pinterest users are more than 1.5 times as likely to search for topics on budgeting as financial planning assumes great significance among first-time homebuyers.

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