Responsible lending act met with praise--Professional organizations push for congressional hearings

Responsible lending act met with praise--Professional organizations push for congressional hearings

May 23, 2005

Study quantifies home improvement activities of recent homebuyersMortgagePress.comhome improvement, Home Improvement Research Institute, HIRI
Proving for the first time what conventional wisdom has long
held, a new study finds that a majority of homeowners make
improvements to their homes within the first year of purchase. Many
consumers also make improvements to their previous homes to prepare
them for sale. Kitchens, bathrooms and living rooms are the most
likely interior spaces to be improved in both newly built and
existing homes. Owners of newly built homes are also likely to do
landscaping projects.
The report, released at the 2004 National Hardware Show, was
commissioned by Reed
Exhibitions and conducted by the not-for-profit Home Improvement Research Institute
The study found that 52 percent of recent home buyers had
completed one or more home improvements within the first year of
purchase, and half were planning at least one more project within
the next year. The most frequently purchased products include
paints and sundries, lumber and building materials, and floor
Overall, recent home buyers spent more than $3,100 during the
first year. Buyers of older homes spent an average of $2,000, while
those who bought new homes spent an average of $5,000. Owners of
older homes most frequently cited a desire or need to replace
worn-out or old materials, while owners of new construction were
most often seeking to beautify the house. Purchases of both types
of homes reported that they did improvements to support new
features and change the decor.
About 40 percent of respondents also said that they made
improvements to their previous home to get it ready to sell. The
most common improvements prior to sale are painting kitchens and
bathrooms. One third of those selling older homes made structural
improvements to the exterior or interior of the house, such as
replacing or repairing roofs, windows or doors; repairing or
replacing interior walls or ceilings; or converting a room to a
different use. Consumers selling new homes were more likely to
install carpeting and improve landscaping prior to sale.
Newer homes vs. older homes
Purchasers of existing homes are more likely to paint interior
spaces; replace or repair flooring; do electrical wiring; and
install new lights and appliances. Owners of new construction are
more likely to landscape and build patios or decks.
Not surprisingly, owners of existing homes have completed and
are planning more improvements than owners of new construction. As
noted, however, owners of new construction spend more on their
Purchasers of newly built homes had a higher average household
income than those who purchased older homes, increasing the
likelihood that more high-priced products would be purchased.
Purchasing home improvement services and
Overall, contractors are involved in about one-third of projects
done to newly purchased homes and nearly half of the projects
completed in previous homes prior to sale. Consistent with other
HIRI research, homeowners most frequently used contractors who had
done previous work for them or who were recommended by family and
friends. About 10 percent of the projects included installers from
home improvement retailers.
Regardless of professional involvement, it was the consumers who
most often purchased the products. The Home Depot and Lowe's were cited as sources for
about three-quarters of those purchases.
Paying for home improvements
Most consumers said they used money from savings to pay for their
recent projects. Those who purchased existing homes were more
likely to use their savings (77 percent) than purchasers of newly
built homes (94 percent).
Less than 10 percent of home buyers used credit cards to pay for
improvements, and two percent said that they used money from a loan
or excess mortgage money.
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