Home builder industry ‘in a new normal’ amid inflation, supply slowdown: Renovator

‘Fixer To Fabulous’ Co-Host Dave Marrs sits down with Yahoo Finance Live to talk about Americans' home spending trends regarding renovation and inflation and the supply chain's impacts of homebuilding materials.

Video transcript

SEANA SMITH: Dave Marrs is here to share his knowledge as a builder and general contractor to tell us everything that we need to know about home renovations. Dave, it's great to see you here. Certainly, we have seen a massive uptick in people wanting to renovate their home. There was a recent Discover survey out finding that 79% of homeowners would rather renovate their homes, the homes that they're in right now, than move. I'm curious to get your perspective on this. As a home renovator, what are you seeing, and how big of an uptick have you seen in activity?

DAVE MARRS: So I-- hello. I could not agree with you more. The amount of remodel calls that we are getting now compared to even just a couple of years ago is-- it's just significant in so many ways. And I think, like the last person that you had on, interest rates is one of those big things that these people are in these homes at 3% and 4%. And they just don't see-- they can't move to another home. So they're renovating what they have.

DAVE BRIGGS: And we've seen the pandemic really shift where we want to live, but also how we want to live. What's the biggest change you've seen and the renovations people are asking for?

DAVE MARRS: I think before the pandemic, you just saw-- you saw a lot more of people, they were in the bigger cities because that's where they worked, where now, there's a lot of people that can-- they can live wherever they want and work from home. So we're seeing a big-- like, people that their house was fine before because they were gone 60 hours a week. Now they're realizing, you know what? I'd really like to get that kitchen remodeled. Or I'd really like to make an office, make a space that I can work from.

So I think it's more just spending more time in your home and realizing some of those things that you just had kind of lived with in the past that now you really feel like you should change.

SEANA SMITH: And Dave, the cost of all this, we talk about it time and time again here at Yahoo Finance, inflation, the impact that that has had on so many of your materials. How much more expensive are renovations today than they were two years ago?

DAVE MARRS: I mean, they are significantly more. And that's-- I think it's everything, like you're seeing in food, like you're seeing in transportation. You're seeing it across the board. I mean, we have the same trucks that the diesel is higher. We have the same import issues, the same-- there's a lot more people in the past two years that were buying houses. So builders were a lot busier, so getting materials. You know, everything's supply and demand in our market. And it's gone up a lot.

Luckily, though, with housing, that's usually people's biggest investment. And even though the house prices have slumped a little bit here in the last few months, they are significantly higher than they were pre-pandemic.

DAVE BRIGGS: Dave, the cost of renovating is more, but the supply chains have also made it far more difficult. Are you seeing easing in terms of the time it takes to get the materials you need?

DAVE MARRS: Yeah, we're seeing a little bit. I mean, you still-- gosh, before the pandemic, you could order windows in four to six weeks, have them where it's double that now. But it's come down from 18 to 21 weeks. And so, like, yeah, it is easing.

And I think that comes down to supply and demand with not as many homes being bought and sold. So a lot of that is helping. Our labor costs are starting to fall a little bit from what they were. So, yeah, it's getting better, but I still think we're just in a new normal from the pre-pandemic levels. And it's just higher than it was, and it's harder than it was to get materials.

SEANA SMITH: Dave, if you're a homeowner out there, you're debating whether or not you should pour the money into a home renovation. What-- when do you know when it makes sense and it will increase the value of your house versus when it doesn't make sense?

DAVE MARRS: Right, so I mean, number one, I would decide, like, do you want to live in this house? Do you want to stay here? And I mean, if that's the case, let it be a reflection of your family. Let it be something that you enjoy. You're spending a lot more time in it. And, you know, Jenny and I always say, like, if you're going to just build a house to sell or build a house for someone else, that's fine.

But we're really-- like, a lot of the homes that we're remodeling and a lot of the remodels we're seeing now are people that they found the area that they love, and they found the location that they want to be in with the community that they live with. And so there's so much value in that. So now, they're just making the home a reflection of what they've always wanted it to be. And I think if all of those boxes are checked, then spend the money. This is-- again, it's a great investment, something that is most people's best investment. . And you're going to raise a family in there. So you better enjoy it.

DAVE BRIGGS: Conversely, Dave, for those people that do want to make a renovation that they'll see value from, if and when they do sell the home, what types of renovations best hold their value?

DAVE MARRS: So, you know, I mean, you think about a house. Like, what ages? I would say a bedroom never really ages. It's four walls. I mean, you can change the paint. It's pretty easy to do, but, you know, where your fixtures are, like kitchens, bathrooms, those are big areas that you can make improvements to where you can see the money. You can see the return on it.

A lot of what we're doing now, we're doing a lot of exterior, a lot of patios. And I don't necessarily know that that's adding a lot of value to the house. But it's raising the standard of living to the family that is there because they're spending more time there. So, you know, you've got to balance what I think your enjoyment of the home as much as the resale of the home.

DAVE BRIGGS: I bet you've got a killer patio. Can't wait to see that. I'm checking out your Instagram feed right now. Catch him on "Fixer to Fabulous." He's the co-host. Dave Marrs, great to have you here on Yahoo Finance. Thanks, my man.