Consumers are more than willing to fix up their homes, and they're prepared to spend, on average, $6,200 on improvements, according to a recent survey conducted by American Express. According to the survey, 62% of respondents plan to embark on some kind of renovation project in 2010. The majority (53%) involve indoor remodeling, with cosmetic work (36%), redoing a room (25%), and installing a new floor (14%) topping the list. In addition, nearly one in three (29%) homeowners plan to remodel their outdoor spaces and more so among young professionals (55%) and affluents (35%); and more than two in five (43%) homeowners are making a conscious effort to invest in green solutions when choosing home improvement materials.
Eighty-five percent of homeowners consider their homes to be their most valuable asset and are more than twice as likely as renters to invest in home improvement projects this year (62% versus 24% respectively). Young professional (86%) and affluent (72%) homeowners will embark on these projects more so than the general population of homeowners this year. On average, across the three homeowner groups, the amount spent on property enhancements will be:
- $6,200 among the general population
- $6,100 among young professionals
- $11,500 among affluents
While some (14%) homeowners are jumping on the do-it-yourself trend and plan to tackle projects themselves, a greater number (47%) plan to hire professionals to get the job done. More than half (54%) of affluents and two-thirds (36%) of young professionals will spend to use a contractor for at least some of the work. Thirty-eight percent of homeowners intend to enlist the help of family and friends.
More than half of affluent (56%) and young professional (54%) homeowners and just under half of the general population (49%) of homeowners list improving their home's appearance as the top reason for making property enhancements. Other reasons for improvements among homeowners include:
- The project(s) is/are necessary and can no longer be put off (19%)
- To increase the value of their home (11%)
- Preparing their home to go on sale (5%)
Nearly 7 in 10 (68%) homeowners said they will finance their projects with cash, check or savings, or use a charge card with the intention of paying the balance off in full before interest rates kick in (28%). Another 10% planned to use their income tax refund. Regardless of how they intend to fund their projects, homeowners are doing so responsibly by staying “within their financial means.”
"Consumers are largely financing home improvement projects with money they have versus various forms of loans, such as home equity lines (9%) or revolving balances on credit cards," the survey noted.
Findings from the survey show that "Americans’ most prized possessions are their homes and they are committed to continuing to enhance its appearance and value in spite of the softer real estate market,” said Pamela Codispoti, American Express senior vice president and general manager, Cardmember Services.[Source: The American Express Spending & Saving Tracker. American Express. 20 April 2010. Web. 11 Jun. 2010.]