Runaway inflation is making everything more expensive right now, including home renovation.
A 2022 Houzz & Home Survey of 70,000 US respondents has found that homeowners plan to spend a whopping $15,000 this year to rehab their houses. That’s a four-year high and a 50% jump over the $10,000 shelled out over the previous three years.
This spending spike is most evident among the newest homebuyers who’ve purchased property in the past year. In fact, Houzz staff economist Marine Sargsyan notes that these recent homebuyers “spend significantly more on renovations than the national median.”
How much more? Brace yourself: It’s double the norm at nearly $30,000.
Yet clearly, no matter how painful the price, homeowners are sucking it up for the sake of making their place more livable. In fact, this survey found that more than half of respondents (55%) are planning to renovate this year whatever the cost.
“Homeowners are clearly committed to investing in their homes despite heightened product and material costs driven by supply chain disruptions,” notes Sargsyan. Other reasons she cites include limited and aging housing stock and older generations opting to upgrade their homes into retirement.
“Since housing demand has been through the roof, lots of people had to purchase homes that weren’t ideal and then renovate them to meet their needs,” explains Khari Washingtona real estate broker at 1st United Realty & Mortgage in Riverside, CA.
Yet one bright spot is that rising real estate prices have given homeowners who are trading up or down from an existing home more equity to tap to fund these projects.
“The real estate market has been so hot of late that rising prices have given some homeowners more equity to make these upgrades,” says Tony Mariottia real estate agent and founder of RubyHome in Los Angeles.
Here’s a closer look at the home improvements they’re splurging on most today.
Kitchens still come first
Photo by Form + Field
The kitchen reigns supreme when renovating right now, with homeowners spending a dramatic 25% more in this space than in 2021. While this makes sense given how much time we spend cooking here, it makes financial sense, too.
“Kitchens have the best return on investment,” Washington notes.
Little rooms get some love
Photo by Sam Kachmar Architects
Smaller spaces are also seeing an increase in spending, reports Sargsyan. They include guest baths (38%), laundry rooms (33%), and guest bedrooms (28%).
“In fact, recent homeowners took on nearly four interior rooms or systems at once, such as electrical or plumbing, and multiple exterior features like windows, doors, and roofing,” she adds.
But the home office renovation number isn’t impressive—just 18% of new homeowners are investing here.
“There are only so many jobs that allow folks to work from home, and making a home office doesn’t necessarily mean a renovation,” Washington explains.
Witness the thousands of us working at our kitchen counters right now!
Contractors and designers are in demand
Photo by Houzz
Electrical and plumbing expertise is a must when renovating, and the numbers in this report agree. The clear majority of homeowners relied on professionals in these fields (89%).
And since the newest homeowners are spending the most, they’re also hiring experts much more often (93% of the time versus 88% for short- and long-term homeowners).
Open floor plans just don’t seem to die
Photo by Selle Valley Construction, Inc.
It seems as if the open concept just won’t quit in American homes, with 29% of survey respondents reporting that they’re knocking down walls. One in six claimed a poor layout was the reason for renovating in the first place.
“People do like open space, but with housing prices climbing, buyers may have settled for homes with layouts they didn’t like,” says Washington. “And current homeowners have decided to stay in their existing houses and make them over into the format they want.”
Home security systems are through the roof
Photo by Ironwood Master Crafters
Safety is important in the home, which would explain the threefold increase since 2015 in outdoor security systems.
Mariotti also theorizes that the drop in prices of internet-enabled cameras and sensors means installing them is more affordable and attractive to cash-strapped homeowners today.
However, he adds, “I don’t personally believe they are much of a deterrent for thieves. Since once you’ve recorded a masked person taking your Amazon packages from your porch, then what?”
Still, peace of mind might be enough here as security systems prove quite popular, second only to lighting as the most frequently installed outdoor upgrade, according to the report.