The Home Renovation Boom Continues
Houzz: Renovation activity and spending hit their highest rate since 2018. Homeowners report a 20% increase in the median renovation spend, reaching $18K.
PALO ALTO, Calif. – Home renovation activity and spending reached its highest rate since 2018, according to the Houzz & Home survey, conducted by the home remodeling site Houzz and reflecting the opinions of nearly 70,000 respondents.
Homeowners are reporting a 20% increase in the median renovation spend, reaching $18,000. Houzz researchers note a big part of that growth is from homeowners with higher budget projects who increased their budgets from $85,000 in 2020 to $100,000 in 2021.
The remodeling surge doesn’t appear to be letting up either. More than half of homeowners surveyed say they plan to renovate in 2022, and 46% plan to decorate their home. Their planned budget has increased to $15,000 for 2022 versus the $10,000 amount it had been for the past three years, Houzz notes in its study.
“Renovation activity remains strong due to market fundamentals, including limited and aging housing stock, despite heightened product and material costs driven by supply chain disruptions,” says Marine Sargsyan, Houzz staff economist. “Homeowners are clearly committed to investing in their homes and are exploring diverse funding sources. This is especially pronounced among recent homebuyers, who rely heavily on cash from previous home sales to fund their projects and spend significantly more than the national median.”
Indeed, recent home buyers spent nearly double the national median ($30,000), according to the survey. Long-term homeowners – those who moved into their home six or more years ago – spent a median of $15,000. Short-term homeowners – those who moved into their home between one and five years ago – spent a median of $19,000 on home renovations.
What they’re renovating
Investments in home remodeling rose for interior rooms, the Houzz survey finds. Kitchens saw an increase of 25% in 2021 compared to 2020, or $15,000 versus $12,000, respectively. Kitchens remain the most popular interior room for home updates and also the most expensive to complete.
Other interior rooms in a home that posted an increase in remodeling included guest bathrooms, laundry rooms, living rooms and guest bedrooms, according to the survey.
Homeowners also are spending more on security systems. Outdoor security systems are the second most frequently installed outdoor upgrade behind lighting.
Financing the home renovation
More homeowners are starting to finance their house projects. The number of homeowners who are relying on cash from savings to fund their renovation projects fell by seven percentage points in 2021 to 76%. Homeowners financing renovation projects with credit cards increased six percentage points to 35%. Recent home buyers and short-term homeowners were more likely to rely on cash from a previous home sale (42% and 19%, respectively) to fund their house projects. On the other hand, long-term homeowners were the most likely to use secured home loans at 17%.
As homeowners spruce up their homes, they may find benefits of those upgrades at resale. The National Association of Realtors®, along with the National Association of the Remodeling Industry, recently released a report that highlights the home remodeling projects that offer potentially the biggest boost at resale.
In the 2022 Remodeling Impact Report, they found that refinishing hardwood floors is the remodeling project that pays back the most.
Source: “The Houzz & Home Survey,” Houzz (April 27, 2022)
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