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Home improvement ramps up in 2018
If you own a house in the U.S., odds are you are planning a home improvement project. In fact, 58 percent of homeowners say they plan to spend money to make their homes a little sweeter this year.
That’s just one of the key findings from the 2018 LightStream Home Improvement Survey, an annual look at homeowners’ renovation plans. From rising budgets to increasing rates of outdoor, bathroom and kitchen remodeling, there are many signs that homeowners are feeling optimistic and ready to show their homes a little love. Forty-five percent plan to spend $5,000 or more on their projects (an all-time survey high), and the percentage of people planning to make the “big spend” — $35,000 or more — doubled from 2017.
Here’s a look at some of the other trends that this fifth-annual survey uncovered.
Home “sweat” home
For the first time ever, LightStream asked homeowners whether they plan to invest some sweat equity in their projects. The answer? A resounding “yes.” Sixty-five percent of homeowners say they’ll do at least some of the work themselves, and 35 percent say they’ll tackle their projects entirely on their own.
The 18-34 group is particularly fond of do-it-yourself projects, with 70 percent planning to work on at least a portion of their renovation.
Love of the outdoors
The popularity of outdoor improvements remains strong. Projects such as decks, patios and landscaping rank at the top of the list for the fifth year in a row, with 43 percent of homeowners planning to transform their outdoor spaces, up five percent over last year.
The outdoors doesn’t get all the love, however. Interior renovations are still strong, with nearly a third of homeowners planning to tackle a bathroom remodel, and more than one in four updating a kitchen.
Staying — and aging — in place
Most people planning a house upgrade aren’t doing it in order to put a “For Sale” sign in the yard. In fact, only seven percent of homeowners are renovating to prepare their homes to be sold, the lowest percentage since 2015.
Instead, 14 percent of homeowners across all age groups — not just baby boomers — are citing “aging in place” as a reason for making a home improvement. Even respondents aged 18 to 34 (11 percent) and 35 to 44 (10 percent) say they’re renovating “to prepare my home so I can stay in it as I get older.”
Tax reform boosting budgets
With recent passage of tax reform, homeowners have already begun calculating how the changes might affect what they spend on home improvements. One in four homeowners who have set a budget for renovation projects stated that tax reform has had an impact, with 18 percent increasing their budget and seven percent decreasing it.
Home remodeling financing
The majority of homeowners (62 percent) plan to pay for projects, at least in part, by using savings. But other home improvement financing options are also in the mix, including credit cards, with 30 percent of homeowners saying they’ll pay for a project using plastic. While credit cards are also a popular option for millennial homeowners, it is significantly less so than last year, down 16 percent.
The percentage of people intending to use a home improvement loan has grown 29 percent from 2017, and 54 percent more 18 to 34-year-olds are planning to fund projects through home improvement financing. Home equity lines of credit (HELOC) also gained popularity, increasing 44 percent since last year.
“Consumers are becoming more comfortable with home improvement loans because of the availability of higher loan amounts, speed of delivery and the overall flexibility they provide,” said Todd Nelson, senior vice president. “That’s one reason LightStream recently extended its financing terms to 144 months.* It gives homeowners with excellent credit the option of paying loans back over a longer period of time while still enjoying competitive fixed rates and the ability to fund on the same day.”