Half of Americans plan to spend more on their current home this year than last year
CHICAGO, June 29, 2021 /CNW/ - During the pandemic, on top of a hot home purchase market, many invested in their homes with DIY projects and renovations. The home improvement trend is about to accelerate according to the latest BMO Real Financial Progress Index, which measures consumer sentiment about finances each quarter.
The survey, conducted by Ipsos, found:
- Half of U.S. homeowners (49%) plan to spend more on home improvements in 2021 than they did last year.
- Renovations are on the rise, with two-thirds of U.S. homeowners (67%) plan to tackle home improvements this year.
- For who refinanced their mortgage in the past year, the above numbers jump to 67% and 84% respectively.
- Cash is the most common plan to pay for home improvements (50%), followed by credit cards (24%), line of credit (12%), and loans (12%).
These findings coupled with a significant dip in homebuying as a financial goal (22% in April versus 27% in January) suggest there's a "love the one you're with" mentality among homeowners.
"We have seen a lot of change in the housing market since the beginning of the pandemic – record low interest rates, incredible demand, and more people working from home. Together, these factors are incentivizing existing homeowners to invest in their current home instead of buying a new home to get improved features," said Mark Shulman, Head of Consumer Lending at BMO Harris Bank. "For those planning renovations, it's helpful to seek advice on how best to fund the renovations within your unique budget and long-term financial goals. It's also important to talk with an advisor early to understand what you can afford. Our customers are often unaware of the many financial products they can consider that will help them continue to make real financial progress through their renovation."
For homeowners planning renovations this year, BMO offers the following tips and advice:
- Plan to improve home value. Think about how your renovations will improve the value of your home. Kitchen and bathroom renovations will have the best return on a home investment, and buyers are increasingly looking for spaces where they can work comfortably from home.
- Secure a line of credit when rates are low. Even if you don't need the loan immediately, having it available gives you quick access to cash at a low rate when you're ready to start your project.
- Maintain your financial momentum. Seek advice from your primary bank to understand the long-term impacts of using cash versus a loan versus a credit card for your unique project and financial profile. They can also help you plan in a way that maintains momentum toward your long-term financial goals.
About the BMO Real Financial Progress Index
Launched in February 2021, the BMO Real Financial Progress Index is a quarterly indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money.
The research detailed in this document was conducted by Ipsos in the United States April 1-20, 2021. A sample of n=2,503 U.S. adults ages 18+ in the were collected. Wave one of the survey fielded Jan. 4-19, 2021 with a sample of n=2,509 U.S. adults ages 18+. Quotas and weighting were used to ensure the sample's composition reflects that of the U.S. population according to census parameters.
For more information on how BMO's products and services can help consumers make real financial progress, visit www.BMOHarris.com.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 500 branches and fee-free access to over 40,000 ATMs across the United States. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the United States. For more information about BMO Harris Bank, visit the company fact sheet. Accounts are subject to approval. BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a highly diversified financial services provider with total assets of CDN$950 billion as of April 30, 2021.
SOURCE BMO Harris Bank