Researchers find Utah residents investing most in home improvements
During the early days of the COVID-19 pandemic, homeowners across the country used their spare time to tackle overdue home projects. As the year continued, a combination of factors, including low interest rates and rising home prices, helped fuel a boom in home renovations, improvements, and remodels. According to the most recent loan-level data from the Home Mortgage Disclosure Act, there are over half a million home improvement loans approved annually. Home improvement spending grew in 2020 and is expected to continue to climb in 2021.
Home improvement spending has increased steadily since 2010, after falling by 17% during the Great Recession of 2007–09. Typically, home improvement spending wanes during economic downturns; however, the COVID-19 recession has proven to be an exception to the rule. One key reason is that the current recession disproportionately impacted lower-wage workers who are less likely to own homes. On the other hand, higher-income homeowners didn’t suffer the same level of job losses or reduced wages, but benefited from reduced spending on things like eating out and travel, which freed up cash for other expenses. With many of such homeowners spending more time at home, they have been eager to create home offices, gyms, and backyard oases featuring decks, outdoor kitchens, and pools.
Investing in home improvements varies by location due to factors such as cost of living, local economic conditions, and the housing market. At the state level, homeowners in Utah and Washington—two of the fastest-growing states—took out the most home improvement loans per capita, at 15.4 and 11.6 loans per 1,000 homeowners, respectively. At the other end of the spectrum, homeowners in Alaska—one of the slowest-growing states—took out the fewest home improvement loans, at just 2.3 loans per 1,000 homeowners.
To find the states investing the most in home improvements, researchers at Construction Coverage analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act, the U.S. Census Bureau, and Zillow. The researchers ranked states according to the number of home improvement loans per 1,000 owner-occupied households. Researchers also calculated the total number of annual home improvement loans, the median loan amount, the median home price, and the loan approval rate.
The analysis found that there were 15.4 home improvement loans per 1,000 owner-occupied households in Utah. Out of all U.S. states, Utah is investing most in home improvements. Here is a summary of the data for Utah:
- Home improvement loans per 1K owner-occupied households: 15.4
- Total annual home improvement loans: 11,122
- Median loan amount: $55,000
- Median home price: $417,724
- Home improvement loan approval rate: 71.5%
For reference, here are the statistics for the entire United States:
- Home improvement loans per 1K owner-occupied households: 7.1
- Total annual home improvement loans: 561,102
- Median loan amount: $55,000
- Median home price: $276,717
- Home improvement loan approval rate: 56.5%
For more information, a detailed methodology, and complete results, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/cities-investing-most-in-home-improvements-2021