Baby Boomers Fuel Demand for Florida Home Improvement Loans

While demand for Florida home loans in general has lessened in the state, there is good news for the remodeling industry:

The largest, most comprehensive study of Baby Boomers found that a majority of those 50 and older plan to stay in their current homes for the foreseeable future and plan improvements or remodeling.

This means an increased number of Florida home improvement loan applications are probably on the way.

Contrary to expectations that people plan to downsize their home after children leave the nest, a new study indicates that life changes common to those over 50 - retirement, the birth of a grandchild or caring for an elderly parent - are often triggers for projects to improve home comfort and functionality in anticipation of spending more time at home.

“Due to real estate taxes - here in Florida, many people will pay higher taxes even if they move to a smaller place - many of our clients are choosing to remodel and remain in place,” said Bill Feinberg, president of Allied Kitchen & Bath, a remodeling firm in Fort Lauderdale.

Florida home improvement loan study

The study was done by New York-based Focalyst, a joint venture between AARP Services Inc. and Kantar, a research and consultancy firm. The study, which gathered data from more than 30,000 consumers from the Baby Boomer generation and older, was sponsored by Atlanta-based Home Depot as a way to gain insight into the housing preferences and home improvement needs of these potential customers.

“The Baby Boomer generation [those born from 1946 to 1964] holds the greatest discretionary economic wealth in the country, and what better target audience is there for any retailer,” said Pat Wilkinson, senior director of marketing for Home Depot.

Among the key findings of the study:

- Sixty percent of those 50 and older expect to live in their current residence during the next five years; this isn’t a group that takes out more Florida mortgage loans past a certain age.
- Two-thirds (65 percent) of them plan to remodel or improve their homes.
- Nearly three-quarters (73 percent) say the kitchen is the most important room in the house.

Although the remodeling market slowed in the second quarter of this year, according to the National Association of Home Builders, it’s still poised to improve based on favorable demographics, the high cost of housing and the lack of tax portability - factors that discourage homeowners from moving, even to a smaller residence.

Baby Boomers, the wealthiest generation in history, are responsible for a majority of the remodeling projects in the market now, and many of those projects involve “universal design” that will allow homeowners to age in place.

These projects include installing slide-out drawers, elevated dishwashers and varying countertop heights in kitchens, as well as higher toilets, shower seats, grab bars, motion-sensing faucets and lever handles, rather than knobs, on faucets in bathrooms.

There may also be a surge in Florida home equity loans in order for these owners to free up cash for such projects.