Houzz: Renovation activity and spending hit their highest rate since 2018. Homeowners report a 20% increase in median renovation spending, reaching $18,000.
PALO ALTO, Calif. — Home improvement activity and spending hit their highest rate since 2018, according to the Houzz & Home survey, conducted by home improvement site Houzz and reflecting the opinions of nearly 70,000 people. questioned.
Homeowners report a 20% increase in median renovation spending, reaching $18,000. Houzz researchers note that much of this growth comes from owners with higher budget projects who increased their budgets from $85,000 in 2020 to $100,000 in 2021.
The remodeling wave doesn’t seem to be stopping either. More than half of homeowners surveyed say they plan to renovate in 2022, and 46% plan to decorate their homes. Their projected budget has increased to $15,000 for 2022 from $10,000 in the past three years, Houzz notes in its review.
“Renovation activity remains strong due to market fundamentals, including a limited and aging housing stock, despite rising product and material costs due to supply chain disruptions,” says Marine Sargsyan, economist at Houzz. “Homeowners are clearly committed to investing in their homes and are exploring various sources of financing. This is especially pronounced among recent buyers, who rely heavily on money from previous home sales to finance their plans and spend significantly more than the national median.
Indeed, recent buyers spent nearly double the national median ($30,000), according to the survey. Longtime homeowners — those who moved into their homes six or more years ago — spent an average of $15,000. Short-term homeowners — those who moved into their homes between one and five years ago — spent an average of $19,000 on home renovations.
What they renovate
Home improvement investments have increased for interior rooms, according to the Houzz survey. Kitchens saw a 25% increase in 2021 versus 2020, at $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 saw an increase in renovations included bathrooms, laundry rooms, living rooms and guest bedrooms, according to the survey.
Homeowners are also spending more on security systems. Exterior security systems are the second most frequently installed exterior upgrade behind lighting.
Finance the renovation of the house
More and more owners are starting to finance their real estate projects. The number of homeowners who rely on cash from their savings to finance their renovation projects fell by seven percentage points in 2021 to 76%. Homeowners financing renovation projects with credit cards rose six percentage points to 35%. Recent buyers and short-term homeowners were more likely to rely on money from a previous home sale (42% and 19%, respectively) to finance their real estate plans. On the other hand, long-term homeowners were most likely to use secured home loans at 17%.
As homeowners spruce up their homes, they can take advantage of those improvements when reselling. The National Association of Estate Agents®as well as the National Association of the Home Improvement Industry, recently released a report that highlights the home improvement projects that potentially offer the biggest resale boost.
In the 2022 Renovation Impact Reportthey found that refinishing hardwood floors is the most profitable renovation project.
Source: “The Houzz and Home Survey”, Houzz (April 27, 2022)
© Copyright 2022 INFORMATION, INC. Bethesda, MD (301) 215-4688