The home improvement industry continues to regain strength as many homeowners are looking to complete home remodeling or maintenance projects this year. In fact, more than half of homeowners (57 percent) plan to spend money on home improvement projects, according to an annual survey by LightStream, an online lending division of SunTrust Banks, Inc. (NYSE: STI), conducted online by Harris Poll among homeowners.
Homeowners planning renovations this yearThe most popular projects will focus on the outdoors, with 43 percent investing in improvements including decks, patios, or landscape remodels. Bathroom remodels (29 percent) and kitchen remodels (26 percent) also remain popular.
Updating a home's look, features and technology are driving 52 percent of renovation plans, followed closely by repairs (49 percent). Interestingly, family needs across generations are also motivating change: five percent say they are remodeling to suit a growing family and three percent are accommodating aging parents.
But just how much are homeowners willing to spend on enhancements? More than one third (36 percent) plan to invest $5,000 or more, with a solid 18 percent spending more than$10,000.
When it comes to paying for these projects, more than half of homeowners say they will tap savings (59 percent). Many plan to use credit cards (30 percent). Seven percent will look to secure a home improvement loan. Home equity lines of credit are also cited as a financing option (9 percent).
"With the economy improving, more and more homeowners are deciding to move forward on remodeling projects," said Todd Nelson, business development officer at LightStream. "Taking the time to consider various financing options such as a home equity loan or personal loan can help make their investments go even further, particularly with today's low interest rates. For people without equity to leverage, an unsecured home improvement loan can be a great solution." According to the second quarter 2014 Zillow Negative Equity Report, nearly 35 percent of homeowners do not have sufficient equity in their homes to leverage.
Some homeowners, even when using savings, choose to finance part of their renovations if it makes financial sense. Like four percent of those surveyed who are planning pools this year, Michael and Michelle Flick had long anticipated enhancing their backyard and had saved for a pool. They planned to add an enclosure as a "phase two project," once they rebuilt their savings.
"We're conservative when it comes to finances and didn't want to take on a lot of debt, but there were cost savings to doing all the construction at the same time," said Flick. "We researched our options and applied for a home improvement loan from LightStream. The rate was really competitive and having the loan proceeds in our bank account gave us great control throughout the construction process."
"Whether to improve indoor and outdoor space for a better family life or to perform routine maintenance, renovations provide myriad benefits," added Nelson. "Consumers are increasingly putting money back into their homes. This is good for the economy and the home improvement industry overall."
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