To buy or to upgrade?

In Denver’s tight homebuying market, upgrades take the cake

A competitive housing market and aging homes mean many homeowners in Denver are tackling long-planned renovations.

According to the National Association of Homebuilders, the median age of owner occupied homes is 39 years in Colorado–and some much older than that. Aging homes mean many homeowners either want to bring their homes up to date, or they need to replace well-worn parts of their homes. And they’re taking remodeling into their own hands to make their home fit their lifestyle.

Bank of America’s Homebuyer Insights Report: Home Improvement and Equity Spotlight found 65% of younger homeowners (ages 18 to 43) and 60% of Gen X homeowners (ages 44 to 56) are likely to renovate this year, compared to 22% of older homeowners (ages 57 to 75).

Making home improvements can simultaneously help you build equity while enhancing your everyday life. In fact, twice as many respondents say they’re approaching home improvements as a means of greater enjoyment in their living space (67%) compared to those seeking to increase their home’s value (33%).

Bringing your home up to date can create a place your family can enjoy for generations to come and help build a legacy and long-term wealth.

In Denver, we’ve seen an uptick in cash-out refinance and home equity line of credit (HELOC) requests as homeowners look to tap into the equity in their homes to fund improvements to their existing homes.

According to Bank of America’s latest report, sustainability is especially important to younger generations when it comes to popular renovations. Half of younger generations want to add solar panels (51%) and energy-efficient appliances (48%) as well as use sustainable or recycled materials (43%).

And while we see so many design ideas we’d like to try, we don’t get much information when it comes to paying for all these fun changes. You might think your only options are to save for a project or rack up debt for that emergency repair, but you have a number of options to turn your dreams into a reality.


The first option that comes to mind for most homeowners is to pay for a renovation with savings. In fact, 62% of homeowners say they plan to pay for the work by using money they have saved. While this can be an effective way to finance some smaller projects, it might not be feasible for homeowners who are doing big projects such as a complete kitchen makeover. Pairing savings with other financing options can give you the funds you need to accomplish your goals.

Home Equity Line of Credit (HELOC)

One of the most valuable benefits of homeownership is the ability to borrow against the equity you build up in your home over time. With rising home prices, homeowners are accumulating wealth at a faster rate and a home equity line of credit lets you borrow against the available equity in your home up to your credit limit. You’ll then have the flexibility of a revolving credit line that can be accessed as needed.

Cash-Out Refinance

cash-out refinance replaces your existing mortgage with a new, larger loan that includes a new interest rate and term. Pocketing the difference between your old mortgage and the new loan can provide you with funds to make home improvements.

Credit Cards

If you’re making minor updates to your home, such as repainting a wall, installing new lighting, or even purchasing appliances, using your credit card can be an effective financing option. However, for more involved projects, credit cards carry high interest rates, so you’ll want to avoid carrying a balance.

No matter how long you’ve lived in your home, the idea of customizing your space to fit your lifestyle can be both exciting and daunting. The excitement of a more functional kitchen or the satisfaction of refinished floors is too often overshadowed by the intimidating questions around money.

For big home renovation projects, doing a little homework and planning before diving in is essential.

Learn how to put a home equity line of credit to work for you with tips from Better Money Habits or by speaking to a lending specialist.

Brandon Blankenship is the Vice President, Enterprise Retail Sales Manager for Bank of America in Colorado.

Categories: Industry Trends, Real Estate