In recent years, persistently high mortgage interest rates have led many homeowners to renovate their existing homes rather than purchase new ones. Although rates have dropped slightly, they remain prohibitively high for many buyers. As a result, homeowners are focusing on upgrades to improve their living spaces and boost their homes’ resale value.
This trend inspired Portland Real Estate to analyze data from the Consumer Financial Protection Bureau (CFPB) to uncover which states secured the highest and lowest average home improvement loans in 2024.
Among the states spending the most on home improvements are New York and Connecticut, ranked fifth and eighth in the study. New York, with a population of 19.6 million, had an average loan of $135, 541. The total number of loans, 59,507, represented 304.5 for every 100,000 people for a total value of $8 billion.
Connecticut (population 3.6 million) was eighth, with residents taking out $1.9 billion for home improvements last year. The 15,053 loans processed — 416.15 loans per 100,000 people — worked out to an average loan of $124,704.
This is nothing compared to Hawaii, the state spending the most on home improvements. In 2023, the state’s residents took out $909.7 million in loans across a total of 4,617 disbursements. But this resulted in an average loan value of $197,023, the highest in all 50 states. The state received 321.71 home improvement loans per 100,000 people.
California ranked second, taking out an average of $176,337 per home improvement loan. The state’s residents received $20.9 billion in home improvement loans in 2023, spread across 118,649 borrowers, leading to 304.50 loans per 100,000 people.
Massachusetts was third, with an average home improvement loan of $164,440. The state’s residents took out 34,427 loans in 2023, which equates to 491.72 loans per 100,000 people.
New Jersey ranked fourth, with an average home improvement loan value of $140,595. The state’s residents received 39,554 loans worth $5.6 billion in 2023.
New Hampshire came in sixth, receiving 8,437 loans in 2023. With an average loan of $126,934, the state received a total of $1.1 billion in home improvement loans in 2023, with 601.76 loans per 100,000 people.
Washington ranked seventh, taking out an average of $126,728 per loan for home improvements. The state’s residents received 452.15 loans per 100,000 people, with $4.5 billion disbursed in total.
In ninth place was Montana. Residents who took out a home improvement loan in the state received an average of $122,424, with $383 million disbursed in 2023.
Colorado rounded out the top 10, with 28,352 loans. The average loan amount in Colorado is $121,551, contributing to the overall $3.4 billion borrowed in the state for home improvements.
Iowa was found to receive the least in home improvement loans, with the average loan of $60,070. The state’s residents took out $628 million in home improvement loans in 2023.
Said a spokesperson: “Research shows that home improvement sales in the U.S. amounted to $544.6 billion in 2022, further projected to reach $600 billion by 2027. This study highlights the states that are driving the growth in the home improvement market across the country.
“The data not only highlights the varying levels of investment in home improvements across the states but also underscores the influence of local economic conditions and housing market dynamics. As we see substantial spending in states with higher property values, it’s clear that homeowners in these areas are prioritizing renovations and upgrades as a means to enhance the value and comfort of their homes.”
