48% of U.S. homeowners plan to remodel or update their home in 2019
According to the latest government data, the homeownership rate in the U.S. stands at 64.8 percent. While home prices have been rising rapidly over the past few years, the latest figures by the Federal Housing Finance Agency show signs of slowing home value appreciation.
Consumer confidence remains strong, according to The Conference Board's recent survey. However, our survey identified the top economic concerns among homeowners in 2019.
In general, homeowners are in stronger financial condition than overall U.S. households. The vast majority -- 88 percent -- of homeowners have at least some savings set aside for emergencies. However, 18 percent of homeowners have less than $1,000 set aside and 34 percent have less than $5,000 set aside.
74% of homeowners believe their home values will increase somewhat or significantly over the next three years.
Homeowners in the West are feeling the most confident about strong growth, while homeowners in the South are feeling the least.
A quarter of homeowners whose home market value is $250,000 or more believe their home value will increase significantly in the next three years compared to 15 percent with home market values of under $250,000. City-dwellers are also more confident their home value will increase significantly (37 percent) compared to those in the suburbs (14 percent) or in rural areas (11 percent).
"Right now, homeowners are at an interesting intersection as they are sitting on record levels of home equity as the economy remains strong yet volatile and uncertain," said Dr. Michael Dooley, Figure's chief economist. "What's clear from the survey data we gathered is that despite any outside factors, including the potential for a Fed hike, homeowners still plan to invest in their homes this year. With mortgage rates contained and household wages growing, the housing market will see a rebound in sales, inventories will moderate, and prices will continue to rise, making 2019 the perfect time to invest in home upgrades."
Love it or Leave It
According to the survey, 79 percent of homeowners are planning home projects this year, with nearly half (48 percent) planning to remodel or update their homes. That compares to 20 percent who say they plan to move into a new home this year.
What are the top home projects?
Boomer homeowners (44 percent) are less likely to prioritize updating or remodeling their homes in 2019 compared to Gen X or Millennial homeowners (each at 56 percent).
What To Do with All That Equity
Forty-two percent of all homeowners surveyed plan to tap their home equity this year, of which 49 percent will use home equity to fund home improvement projects, 22 percent will use home equity to consolidate debt at a lower rate, and 20 percent will use home equity to make a major purchase.
Having likely lived most of their lives by the approach of saving to pay for expenditures as well as having survived the era of massive credit card indulgence, Baby Boomer homeowners (30 percent) are the least likely to tap into their home equity in 2019 compared to Gen Xer (52 percent) and Millennial homeowners (a whopping 72 percent!). At the same time, one-in-five Millennial homeowners plan to earn income on their home by taking on a live-in renter or renting a room on sites like Airbnb.
The Big Question
What do homeowners consider the most Instagram- or Pinterest-worthy part of their home? The top three winners were:
Livingroom (49 percent)
Outdoor area (20 percent)
Kitchen (13 percent)
So it seems homeowners are undeterred by the current uncertainty. Most will be investing in their homes this year, with many homeowners tapping into their record levels of home equity. From the sounds of it, U.S. kitchens are a lot less photogenic than one might have expected -- perhaps it's time for a kitchen update?