Americans are increasingly willing to spend on home renovations, according to a survey that says they are taking on more projects and plan to use more expensive materials throughout the process. Remodeling app Planese outlined in a news release the results of an online survey done with remodelormove.com, in which homeowners were asked roughly 70 questions about their plans to remodel their home or move to a new one. All 5,000 respondents were interested in making some sort of change.
The results indicate Americans are willing to spend 30 percent of their home's value to remodel, up from 25 percent in 2007 and 28 percent in 2010, though home prices were significantly higher in 2007 and lower in 2010 than they are now. People plan to spend an average of about $102,000 to renovate. How homeowners said they'd use that money offers more insight into the consumer mindset.
Based on the survey results, those looking to remodel increasingly plan to hire professionals for the work and use more expensive materials for the renovation. And as far as what they're remodeling, homeowners surveyed in 2013 are undertaking more expensive projects by favoring kitchen updates over bathrooms.
In the news release, Planese CEO and Co-Founder Dan Fritschen added context to the numbers. "Consumers are spending again, which bodes well for the entire home improvement industry," Fritschen said. "More people are feeling secure enough during this economic environment that they are remodeling."
Home improvement is more than enhancing the aesthetics and comfort of a house, because it can pay off in the long term by adding value to the property. No matter how you finance renovations -- personal loan, savings, home equity line of credit -- staying on budget is crucial.
How to Spend the Budget: Though 43 percent of those surveyed by Planese said that they planned to be hands-off in the remodeling process (up from 36 percent in 2010 and 2007), a little do-it-yourself work may free up cash for other parts of the project. Nearly two-thirds of homeowners said they planned to hire a general contractor, and 54 percent said they'd hire an architect, up from 64 percent and 47 percent in 2010, respectively.
The biggest jump in the data seems to be the growing preference for pricey products. In 2007, 9 percent of homeowners said they would use "expensive materials" (the term is undefined in the release), and in 2010 that share was 10 percent. Now, 17 percent expressed a preference for the finer goods. Renovations should be an investment, not a path to debt.
If you need to take out financing in the form of a home equity line of credit, a personal loan or a credit card, make sure you understand the impact that new credit can have on your credit score. (Credit.com's Credit Report Card will provide your free credit scores and let you see how adding a loan or credit card will impact your credit.)