During the real estate boom, it was all the rage to remodel. Homeowners were quick, even to pull equity from their homes to pay for improvements.
That’s because back then, as prices were rising, the return on home improvement investments was high. In case you haven’t noticed, as home prices have dropped, reports have come out that the return on investment in home improvements have dwindled.
According to a CNNMoney.com article, returns on investment of 80-plus percent during the boom times reverted to ROIs in the 60-percent range recently.
However, the article says, there are reasons why investing in home improvements can often be a good thing, even in today’s market. Among the reasons some think it’s a GOOD idea to put money into a home are dropping prices in both material and labor, plus low interest rates on loans.
The article notes some pretty dramatic cost decreases in lumber and drywall since their price peaks in the mid-2000s, during the time when houses were going up as quickly than buyers could buy them.
To read the full CNNMoney.com article, click here.