New study shows rate of Central Pa. area home loans

Harrisburg-Carlisle, Lancaster, and York-Hanover homeowners rank among the top 14 U.S. midsize metros in taking out home improvement loans per 1,000 owner-occupied households in 2022, a new study shows. 

Harrisburg-Carlisle is ninth in the amount of loans at 15.8, Lancaster 10th at 15.7, and York-Hanover 14th at 14.0.  Among U.S. states, Pennsylvania ranked 11th highest overall at 11.5.

The report was released by Construction Coverage, which provides guides, research, and reviews, and examined locations in the U.S.  in which homeowners are investing the most in home improvements. 

Researchers analyzed the most recent data from the FFIEC, U.S. Census Bureau, and Zillow to rank metros and states according to the number of home improvement loans per 1,000-owner-occupied households. 

Along with the number of home improvement loans taken by homeowners, the study also revealed the median home improvement loan amount in these midsize cities. It also showed that homeowners nationally took out 8.8 home improvement loans per 1,000 owner-occupied households in that time, the median loan being $75,000. 

The report by Construction Coverage indicates that homeowners nationally used their additional time to address necessary home projects during the pandemic. Low interest rates and rising home prices helped boost home renovations, improvements, and remodels and those trends continued into 2022.

Construction Coverage reported that recent data from the Joint Center for Housing Studies of Harvard University indicated that the surge in home improvement could be over. Harvard’s July 2023 report concluded that a combination of higher interest rates, lower home prices, and a slower pace of home sales could lead to a 5.9% drop in residential improvement and maintenance spending in 2024. 

While home improvement spending typically falls during economic downturns, the COVID-19 recession proved to be an exception. Construction Coverage noted that a key reason is that the early stages of the pandemic disproportionately affected lower-wage workers who were less likely to own homes. Higher-income homeowners didn’t suffer the same amount of job losses or reduced wages but instead benefited from reduced spending, thus freeing up funds for other expenses, such as creating home offices.