Challenging Housing Market Results in Nearly 80% of Homeowners Preferring to Renovate Than Move
More than 57% of homeowners undertaking projects have gone over budget, and nearly two in three report their project cost has increased since their initial contractor bid.
In light of a difficult housing market filled with high home prices and low supply, Discover Home Loans issued a survey to better understand homeowners’ attitudes towards home improvements, purchasing and refinancing. According to its survey, Discover found 79% of homeowners would rather renovate their current home than move to a different one.
In fact, 58% of Gen Z and millennial homeowners are currently working on home improvements or plan to do so within the next three months, and the majority, 82%, say they plan to improve their home as a form of investment.
“With tappable home equity on the rise, now is the time for homeowners to finance their home improvements with a home equity loan and ultimately, stay in the homes they love long-term,” said Rob Cook, vice president of marketing, digital & analytics of Discover Home Loans. “In some markets, there’s a challenge of low housing inventory and high demand, which is increasing home prices and giving another reason for homeowners to stay with and invest in their current home.”
According to the survey, homeowners are most wanting to conduct routine maintenance, update appliances or refinish their flooring. Notably, the number of Americans planning to update their floors jumped 11 percentage points since August 2020; meanwhile, those planning to replace external elements (roofing, doors and gutters) increased seven percentage points.
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Top 5 Improvements Americans are Wanting |
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Top 5 Reasons Americans Would Rather |
||
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Routine maintenance |
42% |
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They can better personalize their |
27% |
|
Updating appliances |
31% |
|
They view it as less expensive than |
26% |
|
Refinishing or replacing their flooring |
31% |
|
They feel a sense of accomplishment |
21% |
|
Remodeling an existing bathroom |
29% |
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Finding a home is too stressful |
9% |
|
Remodeling an existing kitchen |
28% |
|
The current housing market is too limited |
7% |
Current Economic Conditions Creating Snags for Some
While appetite for home improvement projects remains high, those planning immediate projects are running into problems with price increases and material sourcing. About half of those planning a home improvement now or in the next three months, 48%, say they’ve experienced delays in getting materials for their projects, and 41% think they will encounter delays.
More than 57% of homeowners undertaking projects have gone over budget, and nearly two in three report their project cost has increased since their initial contractor bid. Rising interest rates have had a significant impact as well, resulting in 42% of homeowners delaying their home improvement project.
“As the U.S. continues to deal with rising material costs and supply chain issues, it’s more important than ever for homeowners to plan ahead for their remodel”, said Cook. “The best first step is to get your financing in order. Starting with a loan calculator, like the one provided by Discover Home Loans, can help give homeowners a sense of how much they can borrow, and what monthly payments may look like.”
About the Survey
The national survey of 1,531 homeowners was commissioned by Discover and conducted by Dynata (formerly Research Now/SSI), an independent survey research firm. The surveys were conducted online; the first was fielded from January 20 to January 26. The maximum margin of sampling error was +/-3 percentage points with a 95% level of confidence.
About Discover
Discover Financial Services (NYSE: DFS) is a digital banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America's cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business. It operates the Discover Global Network, comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world. For more information, visit www.discover.com/company.
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