Millennials Breaking the Bank for Home Upgrades

The latest Bankrate.com survey reveals that a rising trend in the housing industry is for homeowners to go into debt in order to make their abodes even better.

According to a new Bankrate.com survey, home is king. Survey findings reveal that more homeowners are investing more money into home improvement. This trend, which began to rise with the arrival of the current pandemic aligns with people are spending much more time at home—working, homeschooling, etc. Making that experience as enjoyable as possible has become a top priority. And this means home upgrades.

In fact, the study showed that home improvements have become such a highly prized goal that Americans are willing to go into debt in order to make their home into the dream abode they desire. According to the survey, millennials especially are jumping on board, as it was revealed that 75% of millennial homeowners (those aged 24-39) are indeed planning on making marked improvements to their homes this year post-pandemic arrival. Among this set, nearly half (46%) reveal they have gone into debt in order to make it all happen.

On a national scale, 32% of all homeowners reported going into debt (or plan to do so) in order to pay for their home improvements. Although the millennials were shown as leading the charge in this trend, fast on their heels were Gen Xers aged 40-55 (38% of whom reported going into debt) and baby boomers aged 56-74 (21% of whom reported taking on debt for home upgrades).

These aforementioned Americans are accomplishing this by numerous avenues, including funding the improvements via credit cards and paying the debt off over time, store financing, personal loans, and even borrowing on home equity or refinancing mortgages.

Among respondents reporting to be improving their homes, 59% stated that they had already completed at least $500 worth of work since early March when the pandemic first started to make waves in the U.S., while 48% stated an intention to do so before the year’s end. These improvements ran the gamut, from purchasing new furniture, upgrading to more modern home electronics and appliances, and myriad others.

Ted Rossman, credit card analyst at bankrate.com, commented on this current phenomenon in the housing industry: “The home improvement industry is booming during the COVID-19 pandemic. Most people are spending a lot more time at home, and this is leading them to spend a lot of money and effort customizing their living spaces.”

Rossman added: “I like seeing that so many people are using credit cards and avoiding interest, which is an excellent way to earn rewards. But there are also a lot of people putting these home upgrades on credit cards and financing over time, which can be one of the worst ways to borrow because the average interest rate is about 16%.”