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Homeowners in these states take out the highest rate of home improvement loans

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August 22, 2022
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Homeowners in these states take out the highest rate of home improvement loans

The number of home improvement projects grew in the United States during COVID-19, as people stayed at home more often and needed additional space, according to Harvard's Joint Center for Housing Studies. In fact, Americans spent $367 billion on home improvement projects in 2021.

Building out a new home office, replacing the roof, upgrading plumbing, or creating a backyard oasis can take substantial funds, so many Americans turn to home improvement loans to help them finance their projects.

A home improvement loan is money secured from a lender to be used for repairing, remodeling, or improving personal property. It's different from a home equity loan in that it isn't based on how much value a homeowner has built up in their house. Home improvement loans aren't tied to the equity of a house, so interest rates are generally higher than on a home equity loan, and homeowners usually pay them off in five years or less.

This gives newer homeowners—and those who haven't paid off much of their mortgage—the opportunity to borrow money to tackle remodeling projects. Home improvement loans also tend to be approved more quickly, so homeowners with a big emergency repair can leverage this type of loan to get the job done.

Home improvement loans have been a vital financial tool during this boom in home renovation. More than 1 million home improvement loans were taken out across the country in 2021, totaling $131 billion in borrowing.

Portland Real Estate analyzed loan origination data from the Consumer Financial Protection Bureau to see which states had homeowners who took out the highest rate of home improvement loans in 2021, the latest information available. The share was determined by dividing the number of owner-occupied houses in each state by the number of home improvement loans originated. The average loan amount was calculated by dividing the total dollar amount of home improvement loans taken out in each state by the number of loans taken out.

A neighborhood in New Jersey
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#15. New Jersey

- Number of loans: 32,745
- Portion of houses with loans: 1.0%
- Total amount loaned: $4.44 billion
- Average loan amount: $135,664

A neighborhood in Vermont
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#14. Vermont

- Number of loans: 2,687
- Portion of houses with loans: 1.02%
- Total amount loaned: $286.9 million
- Average loan amount: $106,764

A house in a suburban neighborhood of Cleveland, Ohio
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Denise Kappa // Shutterstock

#13. Ohio

- Number of loans: 48,502
- Portion of houses with loans: 1.03%
- Total amount loaned: $4.0 billion
- Average loan amount: $82,464

Neighborhoods in Florida
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#12. Florida

- Number of loans: 82,289
- Portion of houses with loans: 1.04%
- Total amount loaned: $10.02 billion
- Average loan amount: $121,751

A neighborhood in Pennsylvania
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#11. Pennsylvania

- Number of loans: 60,798
- Portion of houses with loans: 1.19%
- Total amount loaned: $5.52 billion
- Average loan amount: $90,860

A residential upscale homes in Brookside, Delaware, as seen from an aerial view
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Felix Mizioznikov // Shutterstock

#10. Delaware

- Number of loans: 4,528
- Portion of houses with loans: 1.22%
- Total amount loaned: $434.8 million
- Average loan amount: $96,020

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#9. Arizona

- Number of loans: 33,798
- Portion of houses with loans: 1.28%
- Total amount loaned: $4.39 billion
- Average loan amount: $129,895

A residential neighborhood in Massachusetts
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#8. Massachusetts

- Number of loans: 33,986
- Portion of houses with loans: 1.28%
- Total amount loaned: $5.32 billion
- Average loan amount: $156,645

A home in Portland, Oregon
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#7. Oregon

- Number of loans: 21,394
- Portion of houses with loans: 1.30%
- Total amount loaned: $2.74 billion
- Average loan amount: $128,013

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#6. Washington

- Number of loans: 39,108
- Portion of houses with loans: 1.35%
- Total amount loaned: $5.45 billion
- Average loan amount: $139,358

A neighborhood in Portsmouth, New Hampshire
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#5. New Hampshire

- Number of loans: 7,419
- Portion of houses with loans: 1.38%
- Total amount loaned: $856.1 million
- Average loan amount: $115,387

Residential neighborhood in Colorado during autumn
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#4. Colorado

- Number of loans: 31,069
- Portion of houses with loans: 1.45%
- Total amount loaned: $4.16 billion
- Average loan amount: $133,884

A home in Providence, Rhode Island
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Jon Bilous // Shutterstock

#3. Rhode Island

- Number of loans: 6,518
- Portion of houses with loans: 1.57%
- Total amount loaned: $707.7 million
- Average loan amount: $108,582

An Idaho subdivision as viewed from above
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Charles Knowles // Shutterstock

#2. Idaho

- Number of loans: 14,160
- Portion of houses with loans: 2.18%
- Total amount loaned: $1.88 billion
- Average loan amount: $132,540

Homes in Highland, Utah, in a premium neighborhood with mountain and sky views
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Jason Finn // Shutterstock

#1. Utah

- Number of loans: 25,227
- Portion of houses with loans: 2.51%
- Total amount loaned: $2.97 billion
- Average loan amount: $117,877

This story originally appeared on Portland Real Estate and was produced and distributed in partnership with Stacker Studio.

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