“When our homes became the place where we did it all – work, school, sleep, eat – many of us hoped the world would soon ‘return-to-normal,'” said Todd Nelson, senior vice president of strategic partnerships at LightStream. “Now, after two years of living in a new way homeowners are thoughtfully investing in permanent changes to not only accommodate new lifestyles, but also to add more functionality and emotional benefits to their homes.”
Home renovation plans are back on the rise to create or improve purposeful space. The top home improvement projects continue to be kitchen (39%) and bathroom (36%) remodels. But there has been significant growth in the number of homeowners investing in large projects that create additional useable space and functionality in their homes:
- 20% are planning home additions vs. 12% in 2021
- 20% are planning basement/attic renovations vs. 14% in 2021
- 40% are planning outdoor renovations vs. 35% in 2021
Additionally, homeowners are pivoting toward projects that accommodate remote work/learn lifestyles:
- 25% of homeowners are planning to update technology (i.e. Wi-Fi, smart devices) vs. 17% in 2021
- 19% are improving at-home learning spaces vs. 11% in 2021
“The pandemic has redefined our foundational thinking around how we utilize our homes, what we expect and what we want out of them,” said Nelson. “Whether it’s a new bedroom to accommodate a live-in parent or returning adult child, a home office, a home study room or a backyard escape, more purposeful spaces are clearly a priority for many homeowners. We’ve got new needs, and we need new spaces to meet them.”
The survey also reveals that homeowners are focused on renovation projects that provide emotional fulfillment, not just a return on investment. Only one in three (34%) homeowners say they feel joyful in their home. However, 51% want to feel joyful. Additionally, nearly one in three (29%) cited being “happy with a space for years to come” as an important reason why they would invest in a 2022 project.
These emotional fulfillments are achieved as
- 52% say memories with their family brings them the most joy in their home
- 43% attribute feeling joy to activities they can do while they’re at home (e.g., exercise, work, play games)
LightStream’s annual survey also quantifies that homeowners are eager to take on renovations; 62% agree they get excited about the home improvement projects they could do. However, payment strategies clearly vary, as among those planning 2022 renovations.
- 60% intend to use savings vs. 66% 2021
- 35% intend to use credit cards vs. 30% in 2021
- 23% intend to use a home equity line of credit vs. 9% in 2021
- 21% intend to take out a home improvement loan vs. 14% in 2021
- 17% intend to liquidate or tap into investments vs. 8% in 2021
That said, 43% agree they wish they knew more about how best to pay for home improvement projects. Wanting to learn more about financing options was a need expressed across all generations: Millennials (68%), GenZ (47%); GenX (43%) and Boomers (21%).
“There is definitely a knowledge gap that people recognize as they decide how to pay for their renovations,” said Nelson. “People need to do their homework to avoid paying in ways that could significantly raise their costs,” said Nelson. “For example, while it can be tempting to finance a project on a credit card, variable high interest rates can add thousands of dollars to the overall cost of a project. Home equity lines of credit can be time-consuming to arrange and they rely on taking equity out of a property that so many homeowners have worked diligently to pay off. Tapping into savings or selling high performing investments should be done cautiously, so as not to deplete liquidity that may be better used for other purposes. Even when looking into a home improvement loan—like those provided by LightStream—it’s important to investigate the rates, fees, terms and service you’ll receive, as these can vary greatly between lenders.”
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LightStream provides unsecured, fixed-rate loans with no fees to good-credit customers for practically any purpose, including home improvements.* Through a quick, simple online process, customers can receive funds as soon as the same day an application is submitted. Click here for important disclosures with information on same-day funding, LightStream’s Rate Beat Program and its $100 Loan Experience Guarantee.
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1The 2022 LightStream Home Improvement Survey was distributed by Ipsos among 1,301 U.S. homeowners, between January 4, 2022 and January 13, 2022 via an online survey. Quotas have been set to ensure reliable and accurate representation of the U.S. homeowner population, ages 18+. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. The margin of error for this survey is +/- 2.7% at 95% confidence.
*LightStream loan terms, including APR, may differ based on loan purpose, amount, term length and your credit profile. Lowest rates require excellent credit. At least 25% of approved applicants applying for the lowest rate qualified for the lowest rate available based on data from 10/01/2021 to 12/31/2021. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
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