Skip to main content

Study: Most Homeowners Planning Renovations They Cannot Afford

Phil Hall
Aug 13, 2019
Photo credit: Getty Images/zazamaza

The majority of homeowners carrying significant debt are planning to undertake home renovations, even though this stretches their budget beyond the fraying point.

According to a new survey by Freedom Debt Relief of 1,028 U.S. homeowners with at least $10,000 in unsecured debt, 69 percent said they planned to renovate their home in the next five years–even though 60 percent of these homeowners admitted that they could not afford the needed upgrades to their house.
 
Seventy-three percent of the homeowner respondents said they were going to finance their renovation project with a debt-based financial product. The top vehicles for the renovation projects were a home equity loan (40 percent) credit cards (38 percent), personal loans (32 percent) and a home equity line of credit (26 percent). Twenty-six percent of homeowners planned to spend more than $25,000 on renovations in the next five years, while 25 percent budgeted their spending between $5,001 and $10,000.
 
"The survey shows that homeowners who are carrying credit card and other types of debt – including student loan debt–in addition to their mortgage are more likely to finance their home renovations with a home equity loan, credit card or personal loan," says Michael Micheletti, director of corporate communications for Freedom Debt Relief. "Homeowners would be wise to save as much as possible, and look at their overall financial position before taking on even more debt–debt that could disrupt their bigger financial picture."

 
Published
Aug 13, 2019
More from
Renovation
Poor Market Conditions Make Real Estate Investors Turn Sour

48% of investors believe that the investment market is worse or much worse than it was one year ago.

Analysis and Data
Sep 29, 2021
The Fix Is In For Experienced Flippers

Knowledgeable Investors Have The Advantage Over Newbies In Pandemic Housing Market

Investor Loans
Sep 24, 2021
Are Originators Overlooking The Remodeling Sector?

Freddie Mac sees it. The Harvard Joint Center recognizes it. And at least one giant bank is on to it, too. The question is: Are you?

Renovation
Sep 20, 2021
First-Time Homebuyers Face Unrelenting Pressure In High-Cost Market

First-time homebuyers Ben and Dani Graf decided to go $65,000 over budget on a house that was in serious need of renovations. 

Analysis and Data
Jul 27, 2021
AFR Adds the USDA Renovation Program to Its Suite of Renovation Programs

Eligible homebuyers can combine the purchase of a home with the cost of renovations.

Rural Lending
Jan 17, 2020
Plaza Home Mortgage Now Offering Freddie Mac’s CHOICERenovation Loans

Plaza Home Mortgage will be the first TPO lender to offer the program.

Renovation
Aug 02, 2019