Remodeling Survey: Owners Look to Home Improvement Loans, Renovations
An updated remodeling survey of 5,000 homeowners was conducted in the fall of 2006, showing a continuing trend toward large remodels, with an increasing concern for the cost of the remodel/home improvement loan.
All participants in the survey were considering remodeling their existing home or moving to a different one. Participants had lived in their current home (an average home value of $422,000) for an average of 8.5 years.
Survey respondents stated that they expect to stay in their home for 17 years after their remodel is complete.
Some of the findings in the survey:
- Do-It-Yourself is on the rise for remodelers;
- 32% said they plan to be their own remodeling contractors (up from 2005’s 25%).
- 65% will do at least a portion of the remodeling work (up from 60% last year).
- 50% who plan to remodel will spend 30% of their home’s current value on the project, be it via a home improvement loan or a home equity loan;
- 50% of the respondents want more rooms, such as dens and bedrooms. 57% are planning to add one or more bathrooms.
- 15% described their choice of materials for their remodel as expensive, 10% as economy and 75% want materials, cabinets and trim to be average for the type of home they live in.
- 55% of those considering remodeling are excited about the idea; 10% are dreading the process, largely due to home equity loan rates;
Dan Fritschen, the author of the study, says the trend towards remodeling is deepening with an increasing cost consciousness.
“With housing prices falling and [mortgage interest rates] higher than they were a few years ago homeowners are still remodeling, but with an emphasis on managing costs.”
“Just a year ago with high home prices many homeowners were influenced by the wealth effect and were remodeling with a blank check attitude. What the survey shows is that homeowners are planning to spend about the same amount but are expecting to get more for their money and not hiring a general contractor and doing some of the work themselves is one way homeowners think they can reduce the cost.”