May 21, 2021
We’re five months into 2021 and there is plenty to be excited about for the home improvement industry. In fact, while many industries slowed in 2020 because of the COVID-19 pandemic, the home improvement sector soared.
76% of homeowners in the United States have carried out at least one home improvement project since the start of the COVID-19 pandemic.
Home Improvement spending was up 12% throughout the pandemic and has continued to deliver strong performance through the spring.
Predicting consumer borrowing in 2021
During the COVID lockdown, purchases rose for categories like home decorating, smart home accessories, and consumer electronics. Over $15 billion was spent in 2020 to make homes more comfortable and enjoyable while in lockdown. The competitive housing market and low inventory also contributed to the increased demand for large scale remodeling and home improvement projects.
59% of homeowners reported increased spending on their outdoor spaces, including pools, outdoor kitchens, and large entertainment areas; 40% expect to spend even more between 2021 and 2024.
Early in the pandemic, driveway and front porch gatherings became a key social channel and as a result, consumers spent more on functional, indoor-outdoor living spaces.
In a survey from December 2020, about 40% of consumers reported that they had started a new hobby involving tools or home improvement while nearly 60% said they would continue to spend money on home improvement that would have been spent on other items pre-pandemic.
The summer home improvement busy season has begun in some markets, and contractors are already booking several months in advance. With increased costs, competitive scheduling and a low interest rate environment, consumers are looking for quick financing options.
Further research indicates steady growth over the next five years, driven mainly by a continued rise in per capita disposable income and low-interest rates.
Diversify your portfolio and mitigate risk
With increased deposits and decreased demand in other loan asset classes, banks and credit unions are looking for alternative lending solutions to deploy capital and diversify their portfolio.
LendKey’s Home Improvement Loan program offers unsecured loans to qualified, creditworthy homeowners through a nationwide network of contractors. The program includes credit-default insurance and offers financial institutions a way to mitigate risk through recurring, forward flow loan participations.
With the demand for home improvement projects continuing to rise, LendKey is already welcoming new lenders into the HIL loan participation program for 2022. Learn more about the opportunity by contacting LendKey today at info@lendkey.com.