Homeowners who are remodeling this year plan to make improvements in three interior rooms and complete two or more outdoor projects.

NEW YORK – Homeowners are spending more – an increase of 60% since 2020 – on upgrading their kitchens and other indoor and outdoor areas due to higher product and labor costs, according to a new study by Houzz, an online resource for home remodeling and design.

Median renovation spending rose from $15,000 in 2020 to $24,000 in 2023, reports the 2024 U.S. Houzz & Home Study of more than 30,000 U.S. respondents.

With rising costs for appliances, the study also found that more homeowners are setting a budget before starting improvement work (76%, compared with 73% in 2021), but only a third keep to their budget because of unforeseen costs for products and services, increased project complexity and choosing more expensive products and materials.

People aged 43-58 (Gen X) invested the most on renovation projects with a median expense of $25,000. Boomers (age 59-77) spent $1,000 less but accounted for 56% of renovation activity, says Houzz. Millennials (27-42) responding to the questionnaire had a median spend of $20,000.

Median spend is the midpoint level, meaning half of renovating homeowners spent more and half spent less.

More than half of the surveyed homeowners (52%) plan to renovate in 2024, which is a 3% drop from last year, “indicating a sense of caution,” Houzz study analysts noted in a news release.

Most people responding to the study said they paid for upgrades with cash from savings, proceeds from a prior home sale or a secured home loan. The share of homeowners using credit cards for projects under $5,000 jumped in 2023 by 10% and by 7% for higher-budget projects.

Most respondents plan to make improvements in three interior rooms and complete two or more outdoor projects during their renovations. The kitchen, with a $24,000 median spend, continues to be the most common and expensive interior upgrade. The median spend for a primary bathroom was $15,000 in 2023.

After a brief drop in outdoor living space spending in 2022 compared to pandemic-era interest in 2020-2021, 53% of homeowners spruced up their outdoor living space in 2023, mostly by installing outdoor lighting as well as security cameras and sensors around the property.

People said they were motivated to make the improvements because they finally had time and funds, or they wanted to customize a newly acquired home or renovate with the intention of selling it. Some were making needed repairs or adapting their dwelling to lifestyle changes.

“Looking ahead, with over half of (Houzz surveyed) homeowners planning renovations, it’s evident that the need to update limited and aging housing stock continues to fuel strong demand for home improvements,” despite high interest rates, persistent inflation, and rising product and labor costs, said Marine Sargsyan, Houzz staff economist.

The median age of owner-occupied homes stands at 40 years old, based on the most recent data from the U.S. Census Bureau’s American Community Survey.

The Houzz report, the largest survey of residential remodeling, building and decorating activity published, found people typically spend twice as much time planning a renovation than construction time. Kitchen renovations had the longest timeline in 2023, with 9.6 months of planning and 5.1 months of building on average. Living rooms follow, with 8.1 months of planning and 4.1 months of building, the study found.

Nearly all respondents hired an electrician, plumber, painter or other professional in 2023 to accomplish the work.

Do-it-yourselfers’ most popular purchases were paint, light fixtures, faucets and shower heads. The majority of people in the study renovated or decorated. Home repairs were made by 47% of the respondents while 4% had a new home built in 2023.

As with home improvement products overall, renovating homeowners bought decor items less frequently in 2023 versus 2022, found the study. The highest share declines, up to a 14% drop, were for indoor decor, notably small and large furniture as well as storage and organization solutions. Purchasing rugs and artwork increased slightly.

Houzz has more than 25 million online photos of professionally designed interiors and exteriors to inspire ideas and shop for products as well as links to more than 3 million home remodeling and design professionals including Oregon architects, interior designers, general contractors and design-build firms.

© 2024 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.

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Author: amyc