Företagsnytt
One-third of homeowners used a credit card to pay for home renovations in 2017, according to a study released today by Houzz, Inc., in collaboration with Synchrony (NYSE:SYF), on the role of credit cards in home improvement financing. Consumers charged $141 billion in home improvement product and service purchases to their credit cards in 2017, a 69 percent increase from 2011 ($84 billion).1 During 2016 and 2017, consumer credit spend grew at near double the pace of the overall growth of the home improvement market, driving deeper market penetration.
Renovating homeowners using credit card financing report a median spend of $10,000, with between $1,500 and $4,800 charged to a card. Reliance on credit cards remains high even in larger renovations, with 28 percent of homeowners who spent $50,000 or more on their projects paying for at least part of those renovations with credit cards. Millennial homeowners (aged 25 to 34) were the most likely to use credit cards to finance renovations (41 percent), followed by Gen-Xers between the ages of 35 and 54, and Baby Boomers 55 years of age and older (34 and 30 percent, respectively).
“Aging housing stock, low inventory of homes for sale, and major demographic shifts are driving up demand for home improvements, so it is natural for consumers to look for advantageous financing methods in order to smooth out renovation spend over time,” said Nino Sitchinava, principal economist at Houzz. “Based on our study, credit cards appear to be a competitive financing method for a large share of renovating homeowners, likely explaining the recent acceleration in credit usage.”
Three in five credit card users plan to pay off their balances over time (62 percent), of which, a third plan to pay off credit cards within two and 11 months of purchase (33 percent). Younger generations are more likely to revolve balances (65 and 60 percent of Millennials and Gen-Xers, respectively) than are Baby Boomers (49 percent).
Among those who planned to pay off their balances over time, renovating homeowners were three times more likely to leverage no-interest or low-interest promotions than standard interest rates (74 versus 25 percent), and cited the low cost as the leading motivation for card usage (44 percent). Promotional no-interest financing was popular across renovation projects of all sizes and among homeowners of all ages.
“The Houzz study reinforces that the availability of financing plays an important role in consumers’ home improvement purchasing decisions,” said Courtney Gentleman, SVP, CMO Payment Solutions, Synchrony. “Promotional financing can offer customers an easy and convenient way to make large purchases more affordable, and it can influence where shoppers buy.”
Significantly, half of renovating homeowners used cash and no other form of secured or unsecured financing (54 percent). One in five admit to giving credit cards at least some consideration (18 percent), with 27 percent choosing not to use cards due to perceived high costs. Yet, among those considering a credit card, 37 percent would have used a different financing option, if it were available.
The Houzz & Home Survey
The annual Houzz & Home survey is the largest survey of residential remodeling, building and decorating activity published. The survey covers a wide range of renovation projects in 2017, from interior remodels and additions to home systems, exterior upgrades and outdoor projects. Data gathered includes historical and planned spends, professional involvement, motivations and challenges behind building, renovation and decorating projects, as well as planned activities for 2018. The 2018 study includes nearly 150,000 respondents in the U.S. alone, providing insights into the home improvement activity of the more than 40 million monthly unique users of the Houzz site and mobile apps.
The Houzz & Home Survey was sent to registered users of Houzz and fielded in March-April 2018.
The full report is available here.
Houzz has over 17 million photos of professionally designed interiors and exteriors, including completed kitchen and bathroom projects, and more than 2.1 million active home remodeling and design professionals including architects, interior designers, general contractors and design-build firms.
1 Home Improvement Segment Analysis, Prepared by Argus for Synchrony-Houzz research collaboration, April 2018.
About Houzz
Houzz is the leading platform for home renovation and design, providing people with everything they need to improve their homes from start to finish – online or from a mobile device. From decorating a small room to building a custom home and everything in between, Houzz connects millions of homeowners, home design enthusiasts and home improvement professionals across the country and around the world. With the largest residential design database in the world and a vibrant community empowered by technology, Houzz is the easiest way for people to find inspiration, get advice, find products and hire the professionals they need to help turn their ideas into reality. Headquartered in Palo Alto, Calif., Houzz also has international offices in London, Berlin, Sydney, Moscow and Tokyo. Houzz is a registered trademark of Houzz Inc. worldwide. For more information, visit houzz.com.
About Synchrony
Synchrony (NYSE: SYF) is a premier consumer financial services company delivering customized financing programs across key industries including retail, health, auto, travel and home, along with award-winning consumer banking products. With more than $130 billion in sales financed and 74.5 million active accounts, Synchrony brings deep industry expertise, actionable data insights, innovative solutions and differentiated digital experiences to improve the success of every business we serve and the quality of each life we touch. More information can be found at www.synchrony.com and through Twitter: @Synchrony.