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Good news for home improvement, home furnishings retailers

More and more consumers are taking on upgrades during the pandemic.

Forty-seven percent of homeowners have already completed at least $500 worth of home upgrades since early March (including new furniture, new home electronics, new appliances and other improvements/renovations) and 48% plan to before the end of the year, according to a new Bankrate poll. And 75% of those homeowners are millennials, compared with Gen-Xers (58%) and boomers (55%).

Almost half of those surveyed went into debt for their renovations: Thirty percent used or plan to use a credit card and pay it off over time and 37% used or plan to use a credit card and pay it off all at once, while others used or plan to use store financing (15%), a personal loan (10%), home equity borrowing or mortgage refinancing (6%).

Here are other findings from the Bankrate survey:
•  New appliances are a popular upgrade: Thirteen percent of homeowners who have already upgraded chose new appliances as their No. 1 change, new electronics came in second at 12% and new furniture came in third at 11%. Twenty-six percent said they took on other home improvements and renovations.

•  Bathrooms topped the list for renovations: Among those who upgraded or plan to upgrade, 61% chose a bathroom, 53% a kitchen, 52% the home’s infrastructure (roof, HVAC, etc.), 52% major landscaping, 46% a bedroom and 44% something else.

•  State stats: Breaking the data down among U.S. states, Northeasterners upgraded or plan to upgrade their homes the most (66%), Westerners came in second (61%), Midwesterners third (59%) and Southerners last (56%).

“The home improvement industry is booming during the COVID-19 pandemic,” said Ted Rossman, credit card analyst at Bankrate.com. “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. 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%.”

Bankrate.com commissioned YouGov Plc to conduct the survey.

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