When the COVID-19 pandemic hit the U.S. full force, states across the country called for lockdowns and Americans retreated to their homes.
What started as two weeks to slow the spread has now stretched to almost a year of social distancing. Many people work from home and only rarely leave their houses to take care of necessities.
As everyone hunkered down, a lot of Americans began to look around at their spaces and decide they weren’t quite sufficient. In fact, according to recent research from Discover Home Loans, interest in renovating increased dramatically during the pandemic.
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The majority of homeowners want to upgrade their properties
Discover surveyed homeowners in both March and August of 2020 to understand how the novel coronavirus affected attitudes towards home improvement.
In March, shortly after lockdowns began, people were already eager to make upgrades. In fact, 53% of survey respondents said they planned to make home improvements in the coming year.
This was already a majority of homeowners. But interest in renovations only grew over time. By August, a whopping 58% of homeowners reported home improvement plans.
Most of these homeowners were motivated by the same basic desire: 83% said they wanted to be more comfortable in their homes. Enhancing health and safety were also top priorities, with 62% planning to upgrade to make their home a safer place to be.
Unfortunately, even as the pandemic is driving interest in home upgrades, it’s also making them more difficult to afford. In fact, Discover’s survey also revealed 49% of people have delayed starting projects because of the financial effects of COVID-19.
Be smart about home upgrades, especially during the pandemic
It’s natural to want to improve your home as you spend more time in it. However, it’s also essential to think through the financial implications.
Home improvements can be expensive, and you’re unlikely to increase your home’s value by the same amount you spend. There are several ways to finance home renovations. Some people take out a new mortgage loan. Others might use a personal loan or even a credit card.
If you borrow to improve your home, you’ll also take on an additional monthly obligation, which you’ll still be responsible for paying even if your income falls.
As a result, it’s best to carefully consider whether an upgrade is affordable or makes sense. To assess whether a home upgrade is a good idea:
- Think about how long you’ll stay in your home. If you’ll likely be moving soon, it probably doesn’t make sense to invest the money.
- Explore your options for paying for it. If you can cover it with cash, you’ll avoid making your upgrades more expensive by owing interest on them — but will you regret it later if you need that money? If you have to borrow, will that affect your ability to accomplish other financial goals?
- Consider how stable your income is. If your job isn’t secure, you may not want to invest money in a home upgrade — especially during these times of high unemployment.
- Consider whether the upgrade will add value. If you have to sell, can you recoup most of your money? This will depend on the kind of improvement, as well as how your house compares to others in your neighborhood.
Use these questions to decide if you should move forward with improvements. You might find it makes more sense to try to love your house as it stands. We can all look forward to a day when lockdowns end and we can spend more time elsewhere.
View more information: https://www.fool.com/the-ascent/mortgages/articles/over-half-of-homeowners-planned-home-improvements-during-the-covid-19-lockdown/