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With the economy’s recovery, property prices have moved up to unprecedented levels, and many homebuyers have had to pay more than they anticipated to secure a home. The high home prices have also encouraged many potential home buyers to spend money on improving their existing homes rather than purchase an expensive new one. Because both new and old homeowners have opted for renovations, the home improvement industry has benefited. The managing director of the Joint Center for Housing Studies, Chris Herbert, said, “Home remodeling will likely grow at a faster pace given the ongoing strength of home sales, house price appreciation, and new residential construction activity.”
Investors’ interest in the home improvement industry is evident in the SPDR Homebuilders ETF’s (XHB) 46.9% returns over the past year. Given this backdrop, we think it could be wise to invest in quality home improvement stocks Lowe’s Companies, Inc. (LOW), Builders FirstSource, Inc. (BLDR), and Mohawk Industries, Inc. (MHK) for the long term.
