And almost half of homeowners are planning work within the next 2 years
The pool of potential customers choosing HELOCs to fund a renovation project remains strong.
A survey from TD Bank shows that 48% of US homeowners are planning to do some work on their home in the next two years with the average spend at $50,000.
And while savings or checking accounts are they main sources of funding for those planned renovations (48% and 36% respectively), HELOCs come out top for those seeking financing options.
TD Bank’s Home Equity Trend Watch survey of 1,800 homeowners found that 25% will use a HELOC to fund their renovation while 24% will use a credit card and 18% a personal loan.
The survey reveals that, although as of late 2018 the average US mortgage holder had more than $113,000 in equity in their home, much of that equity remains untapped with just 36% of respondents saying they have had a home equity loan or HELOC.
"We've found that many homeowners simply aren't aware of how they can leverage the equity in their homes," said Jon Giles, Head of Home Equity Lending at TD Bank.
Nearly a quarter of respondents said they could not define a HELOC, 32% of homeowners did not know the current equity in their home, and 16% did not understand the impact of fixed versus variable rates on monthly payments.
What renovations are key?
The survey also asked about the renovations that were planned with 48% focusing on improving their outdoor space, 26% wanting to renovate their bathroom, and 25% plan to update their kitchen.
When it comes to tackling the renovations, 64% of respondents in the 18 to 34 age group said they would do some or all of the work themselves, indicating they are likely looking to save on labor costs. Meanwhile, 60% of boomers said they would hire professionals to carry out all of the work.