Renovation Spending Up 22 Percent in 2016; Increases Forecast for 2017

Window & Door
May 4, 2017
Markets

Houzz released its 2017 Houzz & Home survey, which covers residential remodeling, building and decorating activity, which reported that first-time home buyers and Millennials are spending more than ever on home renovation projects. Survey data gathered from more than 100,000 respondents includes historical and planned spends, professional involvement, motivations and challenges behind building, renovation and decorating projects and planned activities for 2017.

According to the report, in one of the largest increases seen this year, renovators who bought their first home in 2016 spent $33,800 on average, 22 percent more than in 2015. Baby boomers and older generations (55+) continue to spend roughly three times more than Millennial homeowners, however Millennials invested an average of $26,200 in 2016, seven percent more than they spent in 2015. Investment in home renovation overall remains strong as homeowners spent $60,400 on average on 2016 renovations, in line with 2015 ($59,800 on average).

This year is on track to be another boom year for home renovations, with over half of homeowners on Houzz planning to begin or continue renovations in 2017 (52 percent), consistent with plans for 2016. Homeowners plan to spend an average of $27,300 on home renovations in 2017, a four percent increase from planned spend in 2016 ($26,400).

Both first-time and repeat buyers are also taking on large scope projects, remodeling nearly four rooms at the same time, on average. Scope is slightly smaller for long-time (six years-plus) homeowners, who average 2.5 rooms during renovation and/or addition projects. Kitchens and bathrooms, which continue to command the lion's share of renovation spend, are significantly more likely to be renovated than any other room of the home.

“Recent homebuyers drive a significant share of home renovations today, with repeat buyers investing twice as much in their home as first-time home buyers,” said Nino Sitchinava, Houzz principal economist. “Younger and cash-constrained first-time buyers are responding to the low inventory of affordable homes by purchasing properties that require more than just cosmetic upgrades. Not surprisingly, we are seeing their spend on home renovations increasing significantly in 2016 and expect this trend to continue through 2017.”

Read the full report here.