Housing Market is Bouncing Back According to Home Depot
Home Depot is the world’s largest home improvement retailer, and what better resource to tap into to see a glimpse of how the housing market is bouncing back after the recession? The retailer reported a record number of transactions over the last three months. In fact, consumers have spent more than ever since 2006. In stores that have been open for a year or more sales of increased 6%.
“We continue to see positive signs in the housing market,” said Carol Tome, Home Depot’s chief financial officer.
Americans are increasing their spending when it comes to putting their personal touches on their newly-purchased homes, on a remodel or updates to sell a house.
There are two factors that Home Depot recognizes, housing turnover and household formation, that are higher than expected by the retailer. “When consumers believe their home is an investment, not an expense, they spend differently. We are seeing that,” Tome said.
Home prices are increasing, and that is an impetus for buyers to make a real estate investment. With a hot housing market, consumers are also increasing their spending on things they need for their homes such as appliances, tools, plumbing, decor, lighting, kitchen and bath hardware and flooring. Home Depot reported transactions that were $900 or more increased 6% last quarter.
New homes are being built which is good for both home buyers and home builders. In July of this year construction on new single-family houses increased 13% from the last month, making it the biggest percentage increase since 
December 2007. The National Association of Home Builders (NAHB) measure of builder confidence also rose to its highest level in August of this year.
Young consumers are also starting to get in on the action. During the Great Recession many experienced losing their homes or knew of someone who lost their home. “They really got chastened on how much debt they should have. But some of that caution is beginning to diminish a little bit,” Bob Baur, chief global economist at Principal Global Investors said.
A big factor is the stronger job market which has ushered household formation. Young people are secure now and want to move into their own house. This has led to them making big purchases on appliances, furniture and other household items. Good news for our country’s housing market. While it is not completely back to pre-crisis levels, it is definitely looking a lot stronger.
