New Solutions for America’s Renovation Needs
As spring and summer mark the height of home improvement season, homeowners across the United States are investing in their properties amid a historically robust home improvement market. In 2022, residential renovation spending reached an all-time high, surpassing $600 billion. While the remodeling market has contracted slightly since then due to mixed economic conditions, spending is projected to remain near its peak through 2025, according to the Joint Center for Housing Studies of Harvard University. This sustained momentum highlights homeowners’ continued commitment to enhancing their properties, despite economic uncertainty.
However, financing these projects remains a significant challenge for many homeowners. A recent MeridianLink survey showed that approximately 30% of U.S. homeowners are considering taking out a home equity loan or home equity line of credit, up from 21% in 2022, with home improvement cited as the top motivator by 45% of respondents. Still, persistently high interest rates, unease about the loan process, and confusion about repayment terms continue to create hesitation. The Coalition for Home Equity Partnership (CHEP) and shared equity products (SEPs) offer a transparent, debt-free alternative for homeowners seeking greater financial flexibility.
How SEPs Allow Homeowners to Fund Home Renovations
SEPs allow homeowners to receive cash in exchange for a share of their home’s future equity or appreciation – without interest, monthly payments, or a fixed repayment obligation. The real impact of SEPs can be seen in the experiences of homeowners who have used them to fund critical home improvements.
Rita, a New York homeowner, needed to manage a large repair in her home, so she began trying to qualify for a refinance. In the process, she found Hometap, and she appreciated not having to deal with interest rates. She was struck by the availability of her representative, who took the time to clearly explain the process. She noted that she “didn’t have to jump through hoops; the process was a lot easier, smoother, and quicker than a refinance.”
Maritza, a Florida homeowner, wanted a fast and easy process for a few home repairs. She partnered with Unlock, having no interest in “traditional” lending and being tied to a monthly payment. She described the process as “smooth and easy,” noting that she signed a contract on a Friday and had money in her account by Monday to begin her home improvements.
Richard, a Washington State homeowner, was relieved to find Point as an option for accessing his home equity. Not only did Richard use his proceeds for home repairs, but he also paid down existing debt and grew his savings. He was happy to report that Point gave him “more breathing room.”
Conclusion
While the remodeling market remains resilient despite economic headwinds, traditional lending options have become less appealing amid rising interest rates. SEPs are emerging as an innovative and flexible alternative for homeowners seeking to fund home improvements and renovations. As the Harvard study anticipates remodeling expenditures to remain near peak levels through 2025, CHEP members’ fair and transparent approach will be important in providing homeowners with the financial flexibility they need to maintain and improve their properties without the burden of additional debt or monthly payments.
For more information, read our FAQ guide or contact info@homeequitypartnership.org