Renovation Revolution: Dollars Being Spent on Homes

Spring is around the corner, but home improvement is already red hot! As a matter of fact, a just-released survey reveals that home improvement budgets are not only on the rise with 45 percent of homeowners planning to spend $5,000 or more – an all-time high – but those planning the “big spend” of $35,000 or more has doubled in just one year!

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. (NYSE: STI). Budgets for renovations are on the rise: 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 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 18-34 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 five percent over 2017. Nearly a third (31 percent) of homeowners will tackle a bathroom remodel; more than one in four (26 percent) will redo a kitchen.

Staying — and Aging — in Place

Only seven 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 seven 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.

“Homeowners need to set a budget, set a vision and stick with it,” said Kristin Shuff, Senior Vice President, LightStream. “Make sure it is reflective in a written contract with your licensed professional who is helping you do the work. Consider your home improvement financing options there is not a one size fits all solution. There is a lot of options out there you need to figure out what works best for you. Credit cards are great for smaller projects that you may pay off sooner. Things like a home equity line are great options if you have time to go through the process and you have the equity in your home. Home improvement loans which is the LightStream unsecured home improvement loan which is a great option. You can have the funds in your account as soon as the same day you apply. There are no fees. You can get terms up to 144 months for larger projects that give you some options in terms of the size of the project you take on and how you afford it.”

The survey also revealed when it comes to paying for the project 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.

For more information about LightStream home improvement financing, visit LightStream.com/HomeProjects

About Kristin Shuff

Kristin Shuff is a senior vice president at LightStream.com, the national online lending division of SunTrust Bank. A veteran analytics, marketing and customer experience professional, Kristin has been deeply involved in planning and understanding the results of LightStream’s annual home improvement survey. For the past five years, she has had her pulse on the home improvement industry, identifying not only project trends, but also important shifts in consumer strategies to pay for renovations. She is an articulate expert in the financial services industry, who also speaks from experience---having recently lived through a kitchen remodel with her husband and young daughter. Kristin is a graduate of the University of Michigan, and has an MBA from San Diego State University Fowler College of Business.

About LightStream, a division of SunTrust Bank

LightStream is a national online lending division of SunTrust Bank, providing loans for practically any purpose. LightStream's proprietary technology provides consumers with a virtually paperless loan application, underwriting, funding and servicing experience. LightStream financing is available in all 50 states; people need not have a SunTrust account in order to apply. Click here for important disclosures, including a payment example and information on same day funding, LightStream's Rate Beat Program and $100 Loan Experience Guarantee.

About the 2018 LightStream Home Improvement Survey

This year's survey was conducted online within the United States by Harris Poll on behalf of LightStream from Jan. 26 – 30, 2018 among 2,055 U.S. adults ages 18 and older (1,405 homeowners, among whom 808 plan to spend money on home improvements in 2018). The 2017 survey was conducted from Jan. 26 – 30, 2017 among 3,172 U.S. adults ages 18 and older (2,092 homeowners, among whom 1,238 planned to spend money on home improvements in 2017). The 2016 survey was conducted from Feb. 1 – 3, 2016 among 2,048 U.S. adults ages 18 and older (1,258 homeowners, among whom 763 planned to spend money on home improvements in 2016. The 2015 survey was conducted from Feb. 6 – 10, 2015 among 2,015 U.S. adults ages 18 and older (1,279 homeowners, among whom 693 planned to spend money on home improvements in 2015). The 2014 survey was conducted from March 6 – 10, 2014 among 1,291 homeowners ages 18+, among whom 684 planned to spend money on home improvements in 2014. These online surveys are not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology and calculations, contact Julie.Olian@LightStream.com.

Courtesy: LightStream/SunTrust Banks, Inc.