ATLANTA, Feb. 27, 2017 -- More than half (59%) of homeowners are planning to spend money on home improvement projects in 2017, according to the fourth annual survey by LightStream, the online lending division of SunTrust Banks, Inc. (NYSE: STI).
Notably, a shift is occurring on both a regional and multi-generational level as homeowners project higher average spending on renovations this year. The LightStream survey was conducted online by Harris Poll in January 2017.
Key findings suggest homeowners are planning to spend more on home improvements in 2017. 42% percent aim to spend $5,000 or more, and nearly a quarter (23%) plan to spend $10,000 or more – the highest percentage since the inaugural study in 2014. Research analysts at the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University agree, forecasting home improvement and repair expenditures to remain elevated throughout 2017.
Outdoor living remodeling continues to dominate as the number-one home improvement project, with 41% planning outdoor projects such as decks, patios or landscape renovations. Home repairs/technology (32%), bathroom updates (28%) and kitchen remodels (24%) round out the top four projects. Pool installation experienced a survey high of seven percent, a 40% increase since 20163. Both garages and barns also made the list of desired projects this year (14% and 4%, respectively).
While 60% of homeowners plan to tap savings to pay for renovation projects, credit card use increased to 29%, up 16% from last year. Home equity lines of credit (9%), home improvement loans (7%) and liquidating or tapping into investments (6%) are also cited as payment strategies.
"This year's survey shows that many homeowners plan to pay for renovations with credit cards," said Todd Nelson, LightStream business development officer. "Though credit cards typically advertise rewards, they may in fact have high interest rates or convert to higher rates after an introductory period of time. For large-ticket home improvement purchases, credit cards may not be practical. It's important that consumers explore alternatives, such as a home improvement loan or home equity line of credit. These options often offer lower interest rates, and allow homeowners to better manage their overall costs and payments."
Millennial homeowners (ages 18-34), once considered adverse to home ownership, are behind a new renovation trend captured by the survey. In fact, 69% plan to spend money on renovation projects this year, a 25% increase since 2014. Generation Xers (ages 35-44) lead all groups, with nearly three-quarters of homeowners (72%) planning to spend on home improvement projects this year. The boomer generation (ages 55-64) intends to focus on kitchen and bath remodeling (12% and 13% respectively) as well as home repair/technology upgrades (18%), although their overall plans to spend dropped to 57%, an 11% decrease since 20166.
Jumping from last to first, homeowners in the West are seeing major growth, with 64% planning home improvement projects in 2017, a 10% increase since 20167. 61% of homeowners in the South, and more than half of homeowners in the Midwest and Northeast (56% for both), also plan to spend money on renovations this year.
For more information, visit LightStream.com/2017HomeReno.