Renovation Spending Is Up, New Houzz Study Shows
See where home improvement dollars are going and learn about other key findings from the 2021 U.S. Houzz & Home Study
In 2020, the pandemic forced many people to rethink how they use their home. Many homeowners made improvements to accommodate changes in work and life at home. And during that time, median spend on renovations jumped 15% compared with 2019.
Homeowners who chose to tackle a typical renovation project last year might have spent around $2,000 more than if they had renovated in 2019. If they worked on a higher-end project, such as a major kitchen remodel, they might have spent $5,000 more, or higher. Of course, costs vary significantly depending on where people live. What homeowners spent on renovations in a major California city might make someone in Tampa, Florida, dizzy, and not from the humidity.
Find out more below about how homeowners spent their renovation dollars in 2020, according to the just-released 2021 U.S. Houzz & Home Study. (Outdoor upgrade, anyone?) And see which design and remodeling projects homeowners plan to spend money on this year.
Homeowners who chose to tackle a typical renovation project last year might have spent around $2,000 more than if they had renovated in 2019. If they worked on a higher-end project, such as a major kitchen remodel, they might have spent $5,000 more, or higher. Of course, costs vary significantly depending on where people live. What homeowners spent on renovations in a major California city might make someone in Tampa, Florida, dizzy, and not from the humidity.
Find out more below about how homeowners spent their renovation dollars in 2020, according to the just-released 2021 U.S. Houzz & Home Study. (Outdoor upgrade, anyone?) And see which design and remodeling projects homeowners plan to spend money on this year.
A smaller but significant share of homeowners delved into higher-end projects. Some 3% of homeowners said they built a new home, while people whose project costs fell into the top 10% spent $85,000 or more in 2020, a notable increase compared with the $80,000 that group reported spending in the previous two years.
These median spending costs and other details were gathered from more than 70,000 homeowners who responded to the study. The reported projects spanned professional involvement, DIY or both. Keep in mind that median is the midpoint spending level, meaning half of renovating homeowners on Houzz spent more and half spent less.
Economists like to reference the median, or midpoint, figure rather than the average because the average can be skewed, volatile year over year and misleadingly high or low because of a single project that costs far more or less than others.
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These median spending costs and other details were gathered from more than 70,000 homeowners who responded to the study. The reported projects spanned professional involvement, DIY or both. Keep in mind that median is the midpoint spending level, meaning half of renovating homeowners on Houzz spent more and half spent less.
Economists like to reference the median, or midpoint, figure rather than the average because the average can be skewed, volatile year over year and misleadingly high or low because of a single project that costs far more or less than others.
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More Renovations on the Horizon
A majority of homeowners (56%) said they planned to renovate their home in the coming year, the highest percentage since 2017 (52%).
Decorating projects also are on the horizon for many, with 47% of homeowners saying they plan to decorate in the coming year.
“While the pandemic caused initial concern for the residential renovation industry, many homeowners finally had the time and financial means to move forward with long-awaited projects in the past year,” says Marine Sargsyan, Houzz senior economist. “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 skyrocketing prices in the housing market.”
Budget Wisely
Homeowners often end up spending more money than anticipated. The Houzz study shows that homeowners reported a median planned spend of $10,000, a figure that’s been stable for the past couple of years but one that is considerably lower than what the actual median spend was — $15,000 in 2020 and 2018, and $13,000 in 2019.
That’s because, once a renovation project begins, homeowners often decide to tackle a larger scope of project (scope creep), discover an unexpected issue (old plumbing has to be replaced) or get hit with higher costs for materials and products (due to lumber shortages, for example).
For this reason, design and remodeling pros often recommend homeowners budget in an extra 20% for unforeseen circumstances.
A majority of homeowners (56%) said they planned to renovate their home in the coming year, the highest percentage since 2017 (52%).
Decorating projects also are on the horizon for many, with 47% of homeowners saying they plan to decorate in the coming year.
“While the pandemic caused initial concern for the residential renovation industry, many homeowners finally had the time and financial means to move forward with long-awaited projects in the past year,” says Marine Sargsyan, Houzz senior economist. “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 skyrocketing prices in the housing market.”
Budget Wisely
Homeowners often end up spending more money than anticipated. The Houzz study shows that homeowners reported a median planned spend of $10,000, a figure that’s been stable for the past couple of years but one that is considerably lower than what the actual median spend was — $15,000 in 2020 and 2018, and $13,000 in 2019.
That’s because, once a renovation project begins, homeowners often decide to tackle a larger scope of project (scope creep), discover an unexpected issue (old plumbing has to be replaced) or get hit with higher costs for materials and products (due to lumber shortages, for example).
For this reason, design and remodeling pros often recommend homeowners budget in an extra 20% for unforeseen circumstances.
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Where the Money’s Going
A large majority of homeowners (68%) focus renovations on interior spaces, though the share has been slightly decreasing in the past two years. Kitchens and bathrooms top the list of popular interior upgrades (27% and 25%, respectively). On average, homeowners are renovating three rooms at a time.
A large majority of homeowners (68%) focus renovations on interior spaces, though the share has been slightly decreasing in the past two years. Kitchens and bathrooms top the list of popular interior upgrades (27% and 25%, respectively). On average, homeowners are renovating three rooms at a time.
But smaller rooms saw a bump in attention too. Working from home likely influenced the jump of 4 percentage points in home office projects, from 10% in 2019 to 14% in 2020. The median spend of $1,100 on home office projects in 2020 was 10% higher than the $1,000 spent in 2019. Younger generations — millennials and Generation Xers — were more likely to renovate their home offices than were older generations.
Closets also garnered attention. Median spend on closet upgrades leapt 43%, from $700 in 2019 to $1,000 in 2020.
Closets also garnered attention. Median spend on closet upgrades leapt 43%, from $700 in 2019 to $1,000 in 2020.
Meanwhile, more than half of homeowners have upgraded an outdoor area in recent years, but the share of those who did in 2020 jumped 6 percentage points to 57%, from 51% in 2019.
Deck and porch projects increased slightly in popularity, but the median spend on those upgrades jumped 25% last year compared with the previous year.
While paint and light fixtures were the top home-related purchases, lawn and garden supplies took the third spot from faucets and shower heads, which held that position in 2019.
More homeowners also bought outdoor furniture, lighting, rugs and other decor products last year than in the previous year. Fire features such as fireplaces and fire pits increased by 5 percentage points, from 11% in 2019 to 16% in 2020.
See more popular product purchases in the full 2021 U.S. Houzz & Home Study
Deck and porch projects increased slightly in popularity, but the median spend on those upgrades jumped 25% last year compared with the previous year.
While paint and light fixtures were the top home-related purchases, lawn and garden supplies took the third spot from faucets and shower heads, which held that position in 2019.
More homeowners also bought outdoor furniture, lighting, rugs and other decor products last year than in the previous year. Fire features such as fireplaces and fire pits increased by 5 percentage points, from 11% in 2019 to 16% in 2020.
See more popular product purchases in the full 2021 U.S. Houzz & Home Study
Also, the share of homeowners spending over $50,000 on a renovation project increased slightly in 2020, while those who reported spending less than $10,000 on a project decreased to 35% last year from 37% in 2019.
Spending in 2020 also rose for major master bathroom renovations, in which at least the vanity, countertops and toilet are replaced. For master bathrooms over 100 square feet, the median spend was $18,000, up $1,000 compared with 2019.
For master bathrooms of less than 100 square feet, the spend was $10,000, up $2,000 compared with 2019.
On the other hand, the change in spending for a major kitchen renovation, where all the cabinets and appliances are replaced, differed depending on size. For kitchens under 200 square feet, the median spend dropped by $4,000 in 2020 compared with 2019. For kitchens over 200 square feet, however, the spend rose by $5,000 during the same period.
For master bathrooms of less than 100 square feet, the spend was $10,000, up $2,000 compared with 2019.
On the other hand, the change in spending for a major kitchen renovation, where all the cabinets and appliances are replaced, differed depending on size. For kitchens under 200 square feet, the median spend dropped by $4,000 in 2020 compared with 2019. For kitchens over 200 square feet, however, the spend rose by $5,000 during the same period.
Homeowners residing near major California cities spent the most on renovation projects. California cities took the top four spots for the highest median renovation spend among the top 50 metropolitan areas by population. And San Jose, which has held the top spot for the past four years, widened the gap on median spend compared with the No. 2 city.
In 2019, the median renovation spend in San Jose was $5,000 more than in Boston, the city in the second spot. But in 2020, the median spend in San Jose was $8,000 more than in San Francisco, which had taken over the No. 2 spot.
In 2019, the median renovation spend in San Jose was $5,000 more than in Boston, the city in the second spot. But in 2020, the median spend in San Jose was $8,000 more than in San Francisco, which had taken over the No. 2 spot.
But increases in spending weren’t limited to the West Coast. Last year, median renovation spend increased in 27 major U.S. metro areas compared with 2019. In fact, 19 of those metro areas saw double-digit increases in spend.
In 2020, the median renovation spend in Milwaukee jumped 67% from 2019, to $15,000. In St. Louis, the median spend increased by 50%, also to $15,000.
But some places experienced significant drops in median renovation spend. Tampa saw a drop of 33%, from $15,000 in 2019 to $10,000 in 2020. In Houston, median renovation spend decreased 17%, from $14,500 in 2019 to $12,000 in 2020.
See more metropolitan breakdowns in the full 2021 U.S. Houzz & Home Study
In 2020, the median renovation spend in Milwaukee jumped 67% from 2019, to $15,000. In St. Louis, the median spend increased by 50%, also to $15,000.
But some places experienced significant drops in median renovation spend. Tampa saw a drop of 33%, from $15,000 in 2019 to $10,000 in 2020. In Houston, median renovation spend decreased 17%, from $14,500 in 2019 to $12,000 in 2020.
See more metropolitan breakdowns in the full 2021 U.S. Houzz & Home Study
Baby Boomers Lead Renovations, but Gen X Steps Up
As in recent years, baby boomers accounted for the highest share of renovations (52%), followed by Gen X (32%). Boomers also had the highest median spend on projects, at $15,000, but Generation X wasn’t far behind at $14,000. The gap for the two groups was $3,000 in 2019, when boomers’ median spend was $15,000 and Gen X was $12,000.
As in recent years, baby boomers accounted for the highest share of renovations (52%), followed by Gen X (32%). Boomers also had the highest median spend on projects, at $15,000, but Generation X wasn’t far behind at $14,000. The gap for the two groups was $3,000 in 2019, when boomers’ median spend was $15,000 and Gen X was $12,000.
More Homeowners Finally Had the Time and Money to Renovate
What motivated renovation projects in 2020? Many homeowners (44%) said they finally had the time to perform renovations they had always wanted to do. That’s a big jump from the 38% of homeowners who reported the same thing in 2019.
Available money was the second-biggest factor. And the share of homeowners saying they were renovating in 2020 because they were adapting to recent lifestyle changes increased to 18% versus 16% in 2019.
Perhaps the newfound time and financial freedom contributed to a focus on larger, and more expensive, renovations that take more time.
What motivated renovation projects in 2020? Many homeowners (44%) said they finally had the time to perform renovations they had always wanted to do. That’s a big jump from the 38% of homeowners who reported the same thing in 2019.
Available money was the second-biggest factor. And the share of homeowners saying they were renovating in 2020 because they were adapting to recent lifestyle changes increased to 18% versus 16% in 2019.
Perhaps the newfound time and financial freedom contributed to a focus on larger, and more expensive, renovations that take more time.
Credit Card Use Drops
The vast majority of homeowners (83%) paid for their renovation projects with cash they had saved up, which is in line with previous years. But credit card use dropped significantly, to 29% last year compared with 35% in 2019.
Tax refunds gained popularity as a source of funding for renovations, especially for smaller projects that cost between $1,000 to $5,000. Millennials were the most likely demographic to use tax refunds, as well as credit cards. Generation X was more likely than other demographic groups to use a home loan to fund a project.
It’s not hard to imagine that during the pandemic homeowners might have diverted disposable income into home renovations that they otherwise might have spent on vacations, restaurant meals, concerts and other social activities.
The vast majority of homeowners (83%) paid for their renovation projects with cash they had saved up, which is in line with previous years. But credit card use dropped significantly, to 29% last year compared with 35% in 2019.
Tax refunds gained popularity as a source of funding for renovations, especially for smaller projects that cost between $1,000 to $5,000. Millennials were the most likely demographic to use tax refunds, as well as credit cards. Generation X was more likely than other demographic groups to use a home loan to fund a project.
It’s not hard to imagine that during the pandemic homeowners might have diverted disposable income into home renovations that they otherwise might have spent on vacations, restaurant meals, concerts and other social activities.
Overall Challenges Dip
Renovating is rarely easy for homeowners. Finding the right pros and materials, staying on budget and on schedule, and dealing with unexpected circumstances are all challenges likely to arise during a home renovation project. But you would think that renovating during a pandemic would be extra difficult. Surprisingly, the reported challenges, though still present, decreased in 2020 compared with 2018.
Renovating is rarely easy for homeowners. Finding the right pros and materials, staying on budget and on schedule, and dealing with unexpected circumstances are all challenges likely to arise during a home renovation project. But you would think that renovating during a pandemic would be extra difficult. Surprisingly, the reported challenges, though still present, decreased in 2020 compared with 2018.
Most Renovations Rely on Professionals
The vast majority of homeowners (87%) hire professionals to help with their renovation projects. They might include electricians and HVAC specialists, construction pros like general contractors and builders, design-build firms, architects, kitchen and bath designers, interior designers, landscape architects and designers, and lighting designers.
The Houzz & Home survey is the largest publicly available survey of residential remodeling, building and decorating activity in the U.S. The 2021 study — fielded between April 7 and May 24 — collected information from more than 70,000 U.S. respondents.
See more results and download the full study
More on Houzz
Read more stories about Houzz research
Browse millions of home photos for inspiration
The vast majority of homeowners (87%) hire professionals to help with their renovation projects. They might include electricians and HVAC specialists, construction pros like general contractors and builders, design-build firms, architects, kitchen and bath designers, interior designers, landscape architects and designers, and lighting designers.
The Houzz & Home survey is the largest publicly available survey of residential remodeling, building and decorating activity in the U.S. The 2021 study — fielded between April 7 and May 24 — collected information from more than 70,000 U.S. respondents.
See more results and download the full study
More on Houzz
Read more stories about Houzz research
Browse millions of home photos for inspiration
Last year, 53% of surveyed homeowners reported renovating their home, and the median renovation spend per household increased to $15,000 from $13,000 in 2019. That’s a return to the median spending level reported in 2018, signaling a strong focus on home improvement projects throughout the pandemic.
More than half of homeowners (55%) also said they tackled a decorating project last year. Home repairs were popular as well, with almost half of respondents (47%) saying they made a fix.
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