U.S. Cities Investing the Most in Home Improvements [2021 Edition]

During the early days of the COVID-19 pandemic, homeowners across the country used their spare time to tackle overdue home projects. As the year continued, a combination of factors, including low interest rates and rising home prices, helped fuel a boom in home renovations, improvements, and remodels. According to the most recent loan-level data from the Home Mortgage Disclosure Act, there are over half a million home improvement loans approved annually. Home improvement spending grew in 2020 and is expected to continue to climb in 2021.

Home improvement spending has increased steadily since 2010, after falling by 17% during the Great Recession of 2007–09. Typically, home improvement spending falls during economic downturns; however, the COVID-19 recession has proven to be an exception to the rule. One key reason is that the current recession disproportionately impacted lower-wage workers who are less likely to own homes. On the other hand, higher-income homeowners didn’t suffer the same level of job losses or reduced wages, but benefited from reduced spending on things like eating out and travel, which freed up cash for other expenses. With many of such homeowners spending more time at home, they have been eager to create home offices, gyms, and backyard oases featuring decks, outdoor kitchens, and pools.

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Investing in home improvements varies by location due to factors such as cost of living, local economic conditions, and the housing market. At the state level, homeowners in Utah and Washington—two of the fastest-growing states—took out the most home improvement loans per capita, at 15.4 and 11.6 loans per 1,000 homeowners, respectively. At the other end of the spectrum, homeowners in Alaska—one of the slowest-growing states—took out the fewest home improvement loans, at just 2.3 loans per 1,000 homeowners.

To find the metropolitan areas investing the most in home improvements, researchers at Construction Coverage analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act, the U.S. Census Bureau, and Zillow. The researchers ranked metros according to the number of home improvement loans per 1,000 owner-occupied households. Researchers also calculated the total number of annual home improvement loans, the median loan amount, the median home price, and the loan approval rate.

To improve relevance, only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into the following cohorts based on population size:

Small metros: 100,000–349,999
Midsize metros: 350,000–999,999
Large metros: 1,000,000 or more

Here are the U.S. metros investing the most in home improvements.

FOR HOMEOWNERS

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