Weathering Uncertainty

The economy is ‘overheated.’ There are fewer candidates than open positions – causing wage inflation. There are global supply chains issues due to COVID’s continuing impact and the war in Ukraine, and oil prices are spiking due to Russian oil sanctions. Prices for everything have been rising.

In an effort to tame this inflationary cycle, the Fed is taking steps to contract the economy. Interest rates are climbing, the stock market fluctuating wildly, and consumer confidence is in decline.

The Fed needs things to cool down, including the housing market. With interest rates climbing on mortgages many consumers are rethinking their need for a new home. Reasons for needing a new home vary, from growing families to empty nesters looking for less home to maintain. Others need more space for remote work, and others-still simply want something newer and nicer than they have today.

If the current wave of uncertainty, has you worried about a larger mortgage with a higher interest rate, then know that you are not alone. This is exactly the cooling effect the Fed is trying to achieve. Still if your current home does not suit your needs, what are you to do?

For some, the answer is to modify their existing home to meet their needs. This approach offers a couple of advantages. First, if the economic slowdown becomes an economic recession, you have avoided the larger mortgage and higher interest payments. If you undertake a series of projects to meet your needs, you can pause – as needed – during these projects. As consumer confidence and the economy stabilize, you can then resume the work.

A staggered approach, versus the ‘do it all at once’ approach, may also allow you to “save and spend” – self-financing as you go. While it will take longer to complete your project list, you will have avoided taking on debt during a period of higher uncertainty and higher interest rates.

If financing your home upgrades as you go is out, another option is a Home Equity Line of Credit (HELOC). This would allow you to borrow against the equity in your home. Given how home values have climbed the last few years, this will be an available option for many homeowners. While the housing market is ‘less hot’ it has not cooled yet, which means equity is still high. Establish your HELOC now, and you will then have it if you need it.

The economy runs in cycles. After a prolonged period of economic expansion, a slowdown is not abnormal. Hopefully, the Fed can manage a soft-landing. However, uncertainty calls for caution and fixing up the home you have is the more cautious approach.

For those readers that like the idea of fixing what they have at this time, but do not have the time nor ability to fix it themselves, Mr. Handyman is here to help. While some projects will require specialty tradesmen or be outside our scope of typical work (we do not add rooms or change the footprint of the home), we have done many projects to help homeowners better adapt their home to their specific needs.

Bonus rooms have been enclosed, with built in shelving added, to create space for a home office. With wood panelling and a faux fireplace, they now have a pleasant place for a long day of work – at home. Bathrooms can be gutted and reconfigured, or we can just remove the bathtub for a larger walk-in shower. A new vanity and fixtures combined with a new colour paint can make an older bathroom look like something totally new and different. The economy remodel.

Every home, and every homeowner, situation is different. What do you and your home need, and how can Mr. Handyman help. Call today to discuss your specific needs.