The recent wave of renovation works carried out on American homes is a pointer to one thing: American homes are aging. America has massively underbuilt for more than a decade, putting over half of the American homes over the 40-year-old mark. As a result, such homes will need to undergo some renovation. It could be structural (foundation repairs, roof repairs, plumbing etc.), and it could be non-structural, like replacing the floors, counters, cabinets, and many more.
From June 2019 to June 2020, Americans spent $322 million on remodeling and home repairs, which was a 6.8% increase from the previous year’s expenditure. The report, published by Harvard University’s Joint Centre For Housing Studies, projected a further increase for subsequent years.
How Are Homeowners Paying For Renovations?
There are quite a number of financing models homeowners could explore in trying to get their renovation or remodelling done. It could be through savings, credit cards, personal or renovation loans. Another option is the Home Equity Line Of Credit (HELOC). The report concluded that although most Americans were funding their renovation works via savings, the upward trend of those exploring the HELOC option cannot be ignored.
What Do Homeowners Know About HELOC?
The peculiar thing about Home Equity Line Of Credit is that, although more homeowners are increasingly open to the idea of exploring the option:
- Very few (23%) know what it is really about.
- 32% of homeowners cannot tell what their current equity is.
- Only one in six homeowners could understand the impact of fixed vs variable rates on monthly payments.
Regardless, the HELOC option remains immensely popular, despite the lack of education.
To know more about the HELOC option for renovation and why it is popular among homeowners, click here.
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