Page 62 - BusinessWest August 18, 2021

Survey Says
Home Renovation Spending Rises, Especially on Kitchens
Home renovation spending has grown 15% in the last year to a median $15,000, according to the tenth annual
Houzz & Home survey of more than 70,000 U.S. respondents. Higher-budget projects (with the top 10% of project spending) saw an increase from $85,000 or more in 2020, com- pared with $80,000 in the two years prior.
Kitchen projects are the most popular among renovating homeowners, and while median spending has been flat on these projects for the past three years, investment on major remodels of large kitchens jumped 14% to $40,000 in 2020 compared with $35,000 in 2019. The study also found that the busy renovation market will con- tinue through 2021, with 56% of homeowners renovating or planning to renovate this year, the highest share since 2017 (52%).
“While the pandemic caused initial concern for the residential-renovation industry, many homeowners finally had the time and finan- cial means to move forward with long-awaited projects in the past year,” said Marine Sargsyan, senior economist for Houzz. “This pent-up demand, along with other long-standing market fundamentals such as accumulated equity, will empower homeowners to continue investing in their current homes rather than face skyrocket- ing prices in the housing market.”
With homeowners homebound due to the pandemic in 2020, the share who reported that they had wanted to pursue a home renovation all along and finally had the time increased by six percentage points in 2020 (44%versus 38% in 2019), and remains the top renovation trigger. Wanting to do it all along and finally having the financial means also rose (as reported by 36%
of homeowners compared with 34% in 2019). Meanwhile, 25% of homeowners claimed to have renovated instead of moving to find a home that fit their needs because it was the more afford- able option. Surprisingly, remodeling to adapt
to recent changes in lifestyle only increased by two percentage points in 2020 (18%) from 2019 (16%).
While cash remains the leading form of pay- ment for home renovations (83%), the share of homeowners opting to finance their projects with credit cards fell significantly to 29% (from 37% in 2019). Tax refunds gained popularity among renovating homeowners in 2020 (10%), especially when funding small projects up to $5,000.
Gen-Xers Step Up Spending
While Baby Boomers (ages 55-74) have histor- ically led in both renovation activity and spend-
ing, Gen-Xers (ages 40-54) narrowed the gap in 2020. Median spending for Baby Boomers, who represent 52% of renovating homeowners (down from 55% in 2019), remained flat at $15,000. Gen- Xers now account for 32% of renovating home-
“Kitchen projects are the most popular among renovating homeowners, and while median spending has been flat on these projects for the past three years, investment on major remodels of large kitchens jumped 14% to $40,000 in 2020 compared with $35,000 in 2019.”
owners (up from 30% in 2019) and increased their median spending to $14,000 (from $12,000 in 2019). That said, the top 10% of both genera- tions increased their investment in 2020, but
Renovate
Continued on page 63
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62 AUGUST 18, 2021
HOME IMPROVEMENT
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