A recent report release by Houzz, one of the top remodeling sites in the world, highlights a trend we have been seeing for months: remodeling has soared during the coronavirus scare. It appears that people are remodeling their homes, adding features, and changing their properties at a much higher rate than previous months and previous years.
What’s behind this trend? Why are people remodeling, and how are they changing their homes? While we’re at it, how can you finance a change to your property?
How Remodeling During Coronavirus Pandemic Has Soared
The report brought some fascinating numbers. Overall, they say, remodeling leads are up 58% from the previous year for projects on Houzz. Outdoor space appears to be leading the trend, as projects like new decks, screened-in porches, and patios are extremely popular.
The largest increase for home additions, interestingly, appears to be swimming pool design and installation. The report says that this category of remodeling is up a staggering 334%. For whatever reason, people are choosing to purchase and install pools and spas, making their outdoor space a private oasis. Demand for pools and spas has been so heavy that the market is taking notice. A report from CNBC notes that stocks for Poolcorp, one of the top suppliers for pool and outdoor products, is up about 54% from a year ago.
Inquiries on the site for deck and patio service have also increased, up 178% from the previous year. Home extensions and additions have grown by 52%. Fence installation has also soared, with a 166% increase.
Decks and patios are also high on the list. These home features have increased 100% over the past year, while kitchen and bathrooms have increased 40%.
This trend appears to directly contradict predictions from some economists. In early May, a report on MarketWatch suggested that remodeling would go down. Part of the reason this claim was made was because the real estate market was expected to drop far more than it did. So while there may have been a temporary dip, there is significant evidence that remodeling is coming back strong.
Why the Growth in Remodeling During the Coronavirus Pandemic?
So why are people so eager to remodel their homes? Why, in a year of lockdowns and contagious pandemics, are people choosing to invest tens of thousands of dollars into their homes.
While we don’t have data that can give us the answer, we can at least speculate as to why people are remodeling during the coronavirus pandemic.
Making Quarantine More Enjoyable
It seems perfectly plausible that much of the increase is remodeling has been driven by people’s desire to improve the home, the home where they have to spend weeks and months living during quarantine, social distancing, and cancelled events and activities. If someone, because of the coronavirus, has not been going to work and is not eating out, enjoying movies, or going on vacation, they likely have more cash and time to burn. Since they are spending more time at home, and possibly have more cash on hand (if they are still earning an income), it makes perfect sense that they would want to improve their space.
Since you can’t go to the recreation center, why not build a pool or spa on your property? Since you can’t go to the movies, why not build a home theater? Since you can’t eat out, why not revamp the kitchen? These seem like possible motivators for the remodeling surge.
Afraid to Shop for Houses
Another driver for remodeling could be people’s reluctance to shop for houses. In a year marked by an extremely contagious virus, many people don’t want to visit open houses. Instead of putting their health at risk by visiting homes, they may be choosing to upgrade their home. (Whether visiting other homes is better or worse than having contractors in your personal house is a different subject.)
In many cases, people choose to purchase a new house because they want more space, more rooms, a better kitchen, or better amenities; perhaps people are instead choosing to acquire these benefits through remodeling, not a new house.
This concern could work the other way. Perhaps people are having difficulty finding buyers, so instead of moving, they are keeping their home and improving it through remodeling projects.
What are Your Loan Options for Financing a Renovation?
If you are thinking about remodeling during the coronavirus pandemic, you have a variety of options. Here are some of the most popular choices…
Cash-out Refinance
If you have established a high amount of equity in your home, you may be able to use cash-out refinancing. Essentially, your current loan is replaced with a new loan for a higher amount, giving you enough money to repay the previous mortgage and make remodeling upgrades. This is a way for you to take advantage of equity that is locked into your current property.
HELOC
Another popular option is the Home Equity Line of Credit, often known as a “HELOC.” This is not a set loan for a specific amount, but rather a line of credit from which you can make withdrawals. Like a cash-out refinance, this financing allows you to take advantage of the equity built up on your house.
These credit lines can be more affordable than credit cards, as the financing is secured by your home, giving greater assurance to lenders. By reducing risk to lenders, they can offer you more affordable terms.
Get the Remodeling Loan You Need for Your Next Home Improvement
If you are interest in remodeling during the coronavirus pandemic, but don’t have the savings for a new pool, outdoor patio, or renovated kitchen, let us help. We can help you get approved for a cash-out refinance, HELOC, and a variety of other financing options.
Whether you are quarantined, staying home, working from a home office, or simply want to improve your space, our common-sense approach to loan underwriting can help make it happen!
