Home prices are rising and more homes are coming out of the negative equity status. This increase in property values has caused a jump in home equity lines of credit (HELOC), which is also helping boost the U.S. economy.
Because of the increase in consumer confidence borrowers have good feelings about being able to repay their loans. HELOC’s were traditionally used for home improvement projects as a way of increasing their existing home equity. Now borrowers are also being more responsible with their lines of credit by spending the money on necessary expenses including home improvements but also education costs.
Home remodeling is on the rise again and this time more homeowners are looking into projects that benefit their needs as well as keeping the long term in mind. More homeowners are planning out a renovation but only tackling one part at a time in a way to better budget. Those who plan to stay in their homes for the long run are choosing practical upgrades that can save them money such as energy or water saving appliances. There is not as much focus on renovating to add value to a home because the average return is only 60%.