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Homeowners Spend More on Remodels Despite Slight Dip in Activity
Also, planning time far exceeds building time and pro hiring remains strong, the 2024 U.S. Houzz & Home Study reveals
Renovating homeowners’ spending on home improvement projects has surged in the past three years, according to the just-released 2024 U.S. Houzz & Home Study. The median spend on remodeling projects has increased by 60% during that time period, rising from $15,000 in 2020 to $24,000 in 2023. And a majority of renovating homeowners (51%) spent $25,000 or more on renovations in 2023, up from 37% in 2020.
Rising product and labor costs likely are among the economic factors responsible for the increase, Houzz staff economist Marine Sargsyan says. But the higher costs are not stopping people from remodeling. Even though renovation activity dipped slightly in 2023 compared with the previous year, 56% of homeowners still tackled a renovation project in 2023. “Despite prevailing economic headwinds, such as high interest rates and persistent inflation, investment in home renovations continued in 2023,” Sargsyan says.
See more about those findings and other home remodeling and decorating trends from the new study below.
Rising product and labor costs likely are among the economic factors responsible for the increase, Houzz staff economist Marine Sargsyan says. But the higher costs are not stopping people from remodeling. Even though renovation activity dipped slightly in 2023 compared with the previous year, 56% of homeowners still tackled a renovation project in 2023. “Despite prevailing economic headwinds, such as high interest rates and persistent inflation, investment in home renovations continued in 2023,” Sargsyan says.
See more about those findings and other home remodeling and decorating trends from the new study below.
2. Majority Go Over Budget
Creating a budget for a home remodeling project is highly recommended, but many homeowners find sticking to one a challenge. Although an impressive 76% of homeowners set a budget for their home improvements in 2023, 39%, or nearly 2 in 5, exceeded their budget, an increase of 5 percentage points from two years prior.
The main reasons homeowners go over budget include unforeseen costs for products and services, increased project complexity, and choosing more expensive products and materials. But it’s worth pointing out that more than a third of homeowners (34%) managed to stay on budget, and a few (3%) even came in under budget.
Separately, design and remodeling professionals often recommend adding 20% to a remodeling budget to help cover unexpected costs.
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Creating a budget for a home remodeling project is highly recommended, but many homeowners find sticking to one a challenge. Although an impressive 76% of homeowners set a budget for their home improvements in 2023, 39%, or nearly 2 in 5, exceeded their budget, an increase of 5 percentage points from two years prior.
The main reasons homeowners go over budget include unforeseen costs for products and services, increased project complexity, and choosing more expensive products and materials. But it’s worth pointing out that more than a third of homeowners (34%) managed to stay on budget, and a few (3%) even came in under budget.
Separately, design and remodeling professionals often recommend adding 20% to a remodeling budget to help cover unexpected costs.
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3. Planning Time Far Exceeds Building Time
Remodeling projects often are divided into two parts: planning and construction. Homeowners spend about twice as much time on average on the planning phase of a renovation project as they do on the construction phase. And that goes for all rooms.
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. As for smaller areas, such as closets, homeowners dedicate more than 6 months on average to planning, while construction takes more than 3 months on average.
28 Home Design Trends That Will Define 2024
Remodeling projects often are divided into two parts: planning and construction. Homeowners spend about twice as much time on average on the planning phase of a renovation project as they do on the construction phase. And that goes for all rooms.
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. As for smaller areas, such as closets, homeowners dedicate more than 6 months on average to planning, while construction takes more than 3 months on average.
28 Home Design Trends That Will Define 2024
4. Credit Card Use Surges
Homeowners pay for remodeling projects in numerous ways. Cash from savings continues to be the most common form of funding (83%). Surprisingly, given the high interest rates on many credit cards, the share of homeowners using credit cards to help finance remodeling projects jumped by 9 percentage points, to 37% in 2023 compared with 28% in 2022.
Homeowners pay for remodeling projects in numerous ways. Cash from savings continues to be the most common form of funding (83%). Surprisingly, given the high interest rates on many credit cards, the share of homeowners using credit cards to help finance remodeling projects jumped by 9 percentage points, to 37% in 2023 compared with 28% in 2022.
Looking at a breakdown of funding by budget size, the share of homeowners using credit cards for lower-budget projects (from $1,000 to $5,000) increased by 10 percentage points. The share of homeowners using credit cards for higher-budget projects (from $50,000 to $200,000) rose by 7 percentage points.
Meanwhile, for those higher-budget projects (from $50,000 to $200,000), homeowners used secured home loans (23%) and cash from home sales (21%) nearly as commonly as credit cards (32%).
Where Designers Would Spend and Save in a Kitchen
Meanwhile, for those higher-budget projects (from $50,000 to $200,000), homeowners used secured home loans (23%) and cash from home sales (21%) nearly as commonly as credit cards (32%).
Where Designers Would Spend and Save in a Kitchen
5. Gen Xers Still Spend the Most
A generational breakdown reveals interesting patterns in renovation spending. For example, Gen Xers have the highest median renovation spend, $25,000, for 2023. Baby Boomers follow closely behind, at $24,000.
For kitchen remodels, Gen Xers also outspent all the other generations surveyed, with a median spend of $25,000. Millennials are on the lower end, with a median spend of $15,000. For bathroom renovations, Gen Xers and Baby Boomers are tied for the top spot, with a median spend of $15,000. Millennials follow slightly behind ($12,000), and Seniors spent the least ($8,500).
In the graphic shown here, you’ll also notice lightly shaded bars showing the top 10% of spenders (90th percentile). Gen Xers in this group have the highest median spend, $180,000. But interestingly, Millennials in this group have a higher median spend ($148,000) than Baby Boomers ($131,000).
9 Kitchen Remodeling Trends Everyone Should Know About Now
A generational breakdown reveals interesting patterns in renovation spending. For example, Gen Xers have the highest median renovation spend, $25,000, for 2023. Baby Boomers follow closely behind, at $24,000.
For kitchen remodels, Gen Xers also outspent all the other generations surveyed, with a median spend of $25,000. Millennials are on the lower end, with a median spend of $15,000. For bathroom renovations, Gen Xers and Baby Boomers are tied for the top spot, with a median spend of $15,000. Millennials follow slightly behind ($12,000), and Seniors spent the least ($8,500).
In the graphic shown here, you’ll also notice lightly shaded bars showing the top 10% of spenders (90th percentile). Gen Xers in this group have the highest median spend, $180,000. But interestingly, Millennials in this group have a higher median spend ($148,000) than Baby Boomers ($131,000).
9 Kitchen Remodeling Trends Everyone Should Know About Now
6. Kitchens and Baths Get Most Makeovers
The kitchen often is considered the hub of the home, so perhaps it’s not surprising that it’s the most commonly remodeled room in the home (27%). Guest bathrooms (25%) and primary bathrooms (23%) follow closely. About a fifth of homeowners (19%) remodeled their living room in 2023. The red areas in the bar chart here show that a small percentage of homeowners (1% to 2%) created additions for various rooms.
On the right side of the chart, you’ll see that the median spend increased for most interior room upgrades year over year. The exceptions: living rooms and home offices, for which the median spend is unchanged. And homeowners spent less on laundry room updates in 2023 compared with 2022.
How to Remodel Your Kitchen
The kitchen often is considered the hub of the home, so perhaps it’s not surprising that it’s the most commonly remodeled room in the home (27%). Guest bathrooms (25%) and primary bathrooms (23%) follow closely. About a fifth of homeowners (19%) remodeled their living room in 2023. The red areas in the bar chart here show that a small percentage of homeowners (1% to 2%) created additions for various rooms.
On the right side of the chart, you’ll see that the median spend increased for most interior room upgrades year over year. The exceptions: living rooms and home offices, for which the median spend is unchanged. And homeowners spent less on laundry room updates in 2023 compared with 2022.
How to Remodel Your Kitchen
7. Professional Hiring Remains Strong
Consistent with previous years, the vast majority of homeowners (91%) hired pros to help with their remodeling projects in 2023. The share of homeowners hiring specialty service providers increased slightly, rising from 46% in 2022 to 47% in 2023.
On the other hand, there was a slight decrease in the hiring of construction professionals, such as general contractors; the share is down to 42% in 2023 from 44% in 2022. Nearly a quarter of renovating homeowners (24%) hired design-related pros to assist with their projects in 2023.
6 Reasons to Hire a Home Design Professional
Consistent with previous years, the vast majority of homeowners (91%) hired pros to help with their remodeling projects in 2023. The share of homeowners hiring specialty service providers increased slightly, rising from 46% in 2022 to 47% in 2023.
On the other hand, there was a slight decrease in the hiring of construction professionals, such as general contractors; the share is down to 42% in 2023 from 44% in 2022. Nearly a quarter of renovating homeowners (24%) hired design-related pros to assist with their projects in 2023.
6 Reasons to Hire a Home Design Professional
8. Product Purchasing Slows Slightly
Homeowners buy a variety of products when remodeling their home. Paint is the most popular, though the share of homeowners buying paint decreased from 68% in 2022 to 64% in 2023. Light fixtures also are popular (52%), followed closely by faucets and shower heads (49%). Major kitchen appliances dropped by 4 percentage points, to 32%, in 2023.
See more results and download the full study
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Homeowners buy a variety of products when remodeling their home. Paint is the most popular, though the share of homeowners buying paint decreased from 68% in 2022 to 64% in 2023. Light fixtures also are popular (52%), followed closely by faucets and shower heads (49%). Major kitchen appliances dropped by 4 percentage points, to 32%, in 2023.
See more results and download the full study
More on Houzz
Read more stories about Houzz research
Browse millions of home photos for inspiration
Find professionals
Shop for products
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As mentioned, the majority of homeowners surveyed (56%) tackled a remodeling project in 2023. That’s down slightly from 58% in 2022. But even with the downtick, the median amount spent on home renovations has continued to increase since 2019, reaching $24,000 in 2023. Similarly, the top 10% of spending (90th percentile) has risen consistently year over year, reaching $150,000 in 2023.
Meanwhile, decorating projects are a relatively easy way to update a home, and interest in these projects also remains strong. The majority of homeowners (56%) took on decorating projects in 2023, versus 57% in 2022. Home repairs also are popular (47%), while a small share of homeowners (4%) built a new home in 2023.
Keep in mind that the median spend figures throughout the study have not been adjusted for inflation. Also note that “median” means that half of the respondents spent more and half spent less; it’s not the average. Economists like to reference the median, or midpoint, figure rather than the average because the average can be skewed, can be volatile year over year and can be misleadingly high or low because of a single project that costs far more or less than others.
The study gathered these median spending figures and other details from more than 30,000 homeowners who responded to survey questions. The projects reported were handled with the help of pros, were DIY or combined the two approaches.
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