Updated

Updated · MarketWatch · May 11

UBS Sees $1 Billion-$2 Billion Home-Repair Boost as Aging Houses Force Deferred Spending

Updated

Updated · MarketWatch · May 11

UBS Sees $1 Billion-$2 Billion Home-Repair Boost as Aging Houses Force Deferred Spending

Q: With trillions in home equity available, why do most homeowners still lack cash for essential repairs?

Most homeowners are equity-rich but cash-poor because home equity is wealth on paper, not money sitting in a checking account. To use it for a roof, furnace or plumbing failure, owners usually must borrow through a HELOC or home-equity loan, qualify with sufficient income and credit, pay fees, and accept new monthly payments. That is difficult for households already stretched by higher insurance, food, utility and borrowing costs. The repair burden is also larger than many owners plan for. The U.S. housing stock is old—the median owner-occupied home is now about 42 years old, and nearly half were built before 1980—so expensive failures are becoming more common. Surveys show 58% of homeowners have no emergency savings for repairs, and 65% have deferred maintenance in the past five years. Average needed repairs run about $2,920, but major jobs such as roofs can cost $8,000 to $13,000, while foundation work can run far higher. Higher rates have made the gap worse. Many owners are protecting low first-mortgage rates and are reluctant to add debt, even though HELOCs let them avoid refinancing. Others simply do not qualify easily because lenders still look at credit scores, debt-to-income ratios and home values. That helps explain UBS’s view that spending has been delayed, not lost. Essential repairs eventually force “duress” purchases, as Whirlpool has noted. But the trigger is usually breakdown, not abundant cash reserves.

1 articles · Updated · MarketWatch · May 11

$1 billion to $2 billion in extra annual spending could flow to home-improvement retailers as aging homes and older appliances force owners to tackle delayed repairs, UBS said.
20-year-old houses from the mid-2000s boom, pandemic-era equipment now wearing out, and a housing stock with a median age above 40 underpin demand that UBS says is deferred rather than disappearing.
0.5% sales growth for the sector this year is UBS's base case, followed by about 3% in 2027 and roughly 4% in 2028 as repairs and eventual housing turnover support recovery.
Home Depot shares are down about 9% this year and Lowe's 6%, with quarterly results due next week expected to offer a clearer read on whether necessity-driven demand is emerging despite high rates and cautious consumers.

Sources

Right100%

MarketWatch104d ago

UBS Analysts Predict $1B-$2B Home-Improvement Spending Boost Due to Aging Houses

As repair costs rise, will homeowners fuel a retail boom or just resort to temporary fixes?

With trillions in home equity available, why do most homeowners still lack cash for essential repairs?

Is America's aging housing stock a ticking financial time bomb for millions of unprepared homeowners?

Sources

1 total

Right100%

MarketWatch104d ago

UBS Analysts Predict $1B-$2B Home-Improvement Spending Boost Due to Aging Houses

UBS Sees $1 Billion-$2 Billion Home-Repair Boost as Aging Houses Force Deferred Spending

Summary

Sources

Insights

Related Stories

Sources

Related Stories