Hot Housing Market Drives Home Fix-Ups
Remodeling hit a high during lockdowns when homeowners had time and an increased frustration with their living space. Now, rising home equity entices them.
NEW YORK – More homeowners plan to renovate their homes this year. The remodel trend took off during pandemic lockdowns when homeowners had little else to do and a general frustration with a home when they had to spend 24 hours a day within it.
Now, owners are spiffing up their home because they can afford to do so, thanks to higher home prices and their home’s increased equity, according to Bank of America’s “2021 Homebuyer Insights Report: Home Improvement and Equity Spotlight.”
As home prices surge, more homeowners are tapping HELOCs (Home Equity Lines of Credit) to make significant home improvements. Gen X homeowners (ages 44 to 56) are the most likely to report using HELOCs for home improvements.
“Greater reliance on the home as both a workspace and a family center has led many owners to tailor their homes to their needs,” the report says.
Most respondents don’t focus too heavily on increasing their home’s value, however. The majority said they’re viewing home improvements as a way to bring greater enjoyment to their living space (67%). Only 33% said they’re undertaking updates to increase their home’s value (33%).
“Traditionally, home improvement projects have been measured through the lens of return on investment (ROI), but we’re seeing that the emotional connection to one’s home is just as important,” says Ann Thompson, specialty lending executive at Bank of America.
- Greater modernization: Many homeowners want to bring their homes up to date, or they need to replace dated areas of the homes. The median age of the U.S. owner-occupied housing stock is 39 years, according to the National Association of Home Builders.
- Fixer-uppers are OK again: About 42% of younger homebuyers say they would prefer to buy a fixer-upper and improve it over time than to purchase a home that’s move-in ready.
- DIY is trending: Many homeowners are taking a do-it-yourself approach to some of their smaller house projects, such as painting or upgrading hardware and fixtures, with 50% saying they learned how from watching videos. Nearly 40% say they’re inspired by TV shows such as HGTV to do more DIY projects in their home. Younger adults are the most likely to do DIY, with almost 75% of younger homeowners (ages 18 to 43) say they’ve completed DIY work around their house.
- Sustainability is important: Younger generations tend to value sustainability features more than older generations. Half of younger generations want to add solar panels (51%) and energy-efficient appliances (48%) – only one-third of older generations want to add solar panels (33%) and energy-efficient appliances (36%).
Source: “2021 Homebuyer Insights Report: Home Improvement and Equity Spotlight,” Bank of America (2021)
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