Homeowners Spending More on Renovations: Report

Home renovation spend has surged in the last three years, increasing by 60 per cent to an average of $24,000 US in 2023, from $15,000 US in 2020, according to a recently released report by Houzz.

The home remodelling and design platform conducted a survey of more than 30,000 respondents stateside. In doing so, it found the top 90th percentile of spend also rose 77 per cent to $150,000 US, from $85,000 US over the same time period. Additionally, more than half of renovating homeowners spent $25,000 US or more on renovations in 2023, up from 37 per cent in 2020. While renovation activity remains strong with 56 per cent of homeowners having taken on a project in 2023, this is down two per cent from the previous year.

“Despite prevailing economic headwinds, such as high interest rates and persistent inflation, investment in home renovations continued in 2023,” says Houzz staff economist Marine Sargsyan. “The increase in spend and shift to larger budget projects is likely driven by rising product and labour costs. Generation X stands out in particular, leading in renovation expenditures for the second consecutive year.”

This generation, aged 43 to 58, spent on average $25,000 US, compared with baby boomers (59 to 77 years old) at $24,000 US. The top 10 per cent of spenders in these groups allocated substantial budgets, with Gen Xers at $180,000 US and baby boomers at $131,000 US. While Gen X leads in spend, baby boomers continue to drive renovation activity. Gen Xers follow, while activity among renovating millennials (aged 27 to 42) is far below.

Along with this substantial investment, nearly all renovating homeowners enlisted the help of a home professional in 2023, with specialty service providers hired for nearly half of all projects. Homeowners are also taking the time to both plan and save for their projects. Renovation planning is typically double the time the actual construction takes. Plus, “finally having the financial means” is the project catalyst for more than one-third of renovating homeowners.

Of all home improvement projects, kitchens continue to lead as the most commonly renovated interior room, closely followed by guest bathrooms and primary bathrooms. Living room projects are also popular among more than one in five homeowners.

Homeowners consistently undertake multiple renovation projects simultaneously, on average targeting nearly three interior room upgrades and two or more outdoor projects at one time.

“Looking ahead, with over half of homeowners planning renovations, it’s evident the need to update limited and aging housing stock continues to fuel strong demand for home improvements,” says Sargsyan.

Published annually, the Houzz report is the largest survey of residential remodelling, building and decorating activity. There is no equivalent report in Canada.

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