Homeowners expecting steady home improvement spending

Reflecting recent census data and economic sentiment, most American homeowners say they expect to maintain or increase a steady pattern of home improvement spending, according to the Lowe's Home Improvement Trendex survey. The survey also found that 82 percent of the homeowners surveyed consider their home to be a better long-term investment than the stock market.

Along with the steady housing market, home improvement spending is prospering in the current economy, according to findings of the survey.

At the same time many economists indicated the current recession was kicking into gear, home improvement spending rose 4.8 percent in 2001.

Additionally, 64 percent of the Trendex survey respondents said they do not intend to let this year's sluggish economic news slow down their home improvement plans.

In fact, home improvement enthusiasts plan to spend an average of $4,792 in the coming year, according to the survey.

"On average, homeowners expect to spend nearly $400 a month on home improvement in the coming year. The sluggish economy and the post-Sept. 11 nesting trend resulted in people keeping their money close to home," said Greg Bridgeford, Lowe's senior vice president. "Home improvement spending has consistently grown in recent years."

Beyond the average, one in 10 homeowners plans to spend $10,000 or more on home improvement projects in the next 12 months.

According to the Joint Center for Housing Studies of Harvard University, expenditures for remodeling this year should rival, and perhaps surpass, those for home building. Also, mortgage rates, now at 35-year lows, and easy-to-obtain home equity loans are spurring new purchases, renovations and home improvements overall.

Large scale remodeling projects may explain another key Trendex finding. Nearly one-quarter of homeowners 21 percent say they would consider taking out a loan or using a credit card to finance a home improvement project.

"We believe that the customer segment interested in alternative financing options is growing. We have witnessed an increased demand for our Lowe's credit cards," Bridgeford said. "Whether customers are doing it themselves or contracting the work, they seem to appreciate having credit options when it comes to home improvement."

The Lowe's Home Improvement Trendex survey was conducted by Harris Interactive in August 2002 and encompassed 500 15-minute telephone interviews among homeowners age 18 and older. The margin of error for this study is plus or minus 4.4 percent.