Consumers' outlay on renovations rose 7.3% last year
U.S. consumers spent 7.3 percent more on home renovations last year as lower mortgage rates pushed real estate sales to new highs, a Harvard University report said.
Homeowners laid out a record $130.4 billion on tubs, floor tiles, sinks and the like, compared with $121.5 billion in 2002, according to Harvard's Joint Center for Housing Studies in Cambridge, Mass.
Home sales spur renovations because new owners tend to paint and refurbish their homes to suit their own tastes, said Nicolas Retsinas, the center's director.
"Even though mortgage rates were fluctuating in the second half of 2003, home sales - and the resulting move-in renovations - continued to be at record levels," Retsinas said.
Sales of new and existing homes probably rose 9.5 percent, to 7.16 million, last year from a record 6.54 million a year earlier, David Lereah, chief economist of the National Association of Realtors, has said.
The average U.S. rate for a 30-year fixed mortgage rose to 6.44 percent in September, the highest for last year, after falling to 5.21 percent in June, the lowest since 1958, according to Freddie Mac. Last week, the rate was 5.66 percent, the second-largest U.S. mortgage buyer said.