More than half (58 percent) of homeowners are planning to spend money on home improvement projects in 2018, according to the fifth annual LightStream Home Improvement Survey. LightStream is the national online lending division of SunTrust Banks, Inc. Among homeowners planning renovations, 45 percent will spend $5,000 or more—an all-time survey high. Those planning to spend $35,000 or more doubled from 2017.
The survey shows robust enthusiasm for renovation, as well as a thoughtful desire to balance a home’s needs and the homeowner’s budget, so they have the financial confidence to move forward. Specifically, the survey revealed the following trends:
Home “Sweat” Home
The majority of homeowners plan to invest sweat equity, as 65 percent say they’ll do at least some of the work themselves. The 18 to 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 (43 percent), up 5 percent over 2017. Nearly a third (31 percent) of homeowners will tackle a bathroom remodel; more than 1 in 4 (26 percent) will redo a kitchen.
Staying—and Aging—in Place
Only 7 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 7 percent decreasing it.
Paying for Projects
The majority of homeowners (62 percent) plan to pay for projects, at least in part, by using savings. Additional payment strategies were further revealed. Intent to fund through home equity lines of credit (HELOC) jumped from 10 to 13 percent. “U.S. economic growth and limited housing inventory have contributed to healthy home equity gains,” said Ellen Koebler, SunTrust head of consumer solutions. “HELOCs can offer a financial solution for many homeowners, as accrued value may be available to tap for renovations.”
At the same time, the percentage of people intending to use a home improvement loan has grown 29 percent from 2017 with 54 percent more 18- to 34-year-olds planning to fund projects through home improvement financing.
“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, LightStream 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. And, like all LightStream loans, there are no pre-payment penalties should they decide to pay their loan off early.”
Other financing options are being considered as well. Overall, 30 percent of homeowners say they’ll pay for some portion of their 2018 project with a credit card, 16 percent fewer homeowners aged 18 to 34 plan to use them compared to last year.
A comprehensive infographic highlighting the 2018 LightStream Home Improvement Survey is available to download. For more information about LightStream home improvement financing, visit LightStream.com/HomeProjects.
This report originally appeared in our sister publication Qualified Remodeler.