Find out where homeowners are putting their renovation dollars and more details from the 2022 U.S. Houzz & Home Study
Home renovation activity has reached its highest rate since 2018, according to the just-released 2022 U.S. Houzz & Home Study. Renovation spending, up 20% in 2021 compared with the previous year, also has hit its highest rate in four years.
Read on to see what’s going on in home remodeling now, including how homeowners are spending their renovation dollars, how many people are going over their budget and which professionals homeowners are hiring to help with their projects.
Remodeling Activity and Spending Reach Highest Rates Since 2018
A larger share of homeowners (55%) tackled a home renovation project — including kitchen and bathroom remodels — in 2021 compared with previous years (53% in 2020, 54% in 2019 and 54% in 2018).
Decorating projects are popular as well. More than half of homeowners (55%) decorated their homes in 2021.
“Market fundamentals, including limited and aging housing stock, continue to propel the home renovation market,” Marine Sargsyan says. “Homeowners are clearly committed to investing in their homes despite heightened product and material costs driven by supply chain disruptions, and are exploring diverse funding sources. This is especially pronounced among recent homebuyers, who rely heavily on cash from previous home sales to fund their projects and spend significantly more than the national median.”
In 2021, median spend on renovation projects leaped 20% year over year, to $18,000. That follows a 15% jump in median spend from 2019 to 2020, according to Houzz.
Keep in mind that the median means that half of the people 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.
Higher-budget projects (the top 10% of spending) also contributed to the substantial growth. Spend on these top-end projects increased from $85,000 in 2020 to $100,000 or more in 2021.
The study gathered these median spending costs and other details from more than 67,000 homeowners who responded. The projects reported were handled with the help of pros, were DIY or combined the two approaches.
New Homeowners Spend the Most
Recent homebuyers comprise 10% of homeowners who renovated in 2021. Their median spend on renovation projects is $30,000, nearly double that of short-term ($19,000) and long-term homeowners ($15,000) who renovated. Short-term homeowners are those who have owned their home for one to five years, while long-term homeowners have owned for six years or more.
The number of projects recent homebuyers take on at a single time — an average of three to four rooms, along with updates to home systems such as electrical and plumbing — is potentially a contributing factor to the higher spend.
This new-homeowner group also has the highest spend for higher-budget projects (the top 10% of spending), at $175,000, compared with $100,000 for short-term homeowners and $90,000 for long-term homeowners.
Also, interestingly, while long-term homeowners make up the largest share (60%) of those who renovated in 2021, they have the lowest median spend overall ($15,000), as well as for higher-budget projects ($90,000).
Renovation Spend Increases for Almost All Interior Rooms
Median spend increased for almost all interior room renovations in 2021. Kitchens are the most popular room to update. In 2021, the median spend on kitchen remodels was $15,000, a 25% increase from 2020.
But other rooms saw even bigger spending increases year over year; guest bathrooms: 38%, to $4,400; living rooms: 33%, to $4,000; laundry rooms: 33%, to $2,000; and guest bedrooms: 28%, to $1,275.
Homeowners Plan to Spend More on Projects in 2022
A majority of homeowners (55%) plan to renovate in 2022, a small drop from the 56% who had planned to renovate in 2021. But for the first time since 2018, homeowners plan to spend more on their renovations than in the previous year. The planned median spend for 2022 is $15,000, a 50% increase from $10,000 in each of the past four years.
Common knowledge about supply chain issues and the increased costs of construction materials likely contributed to the rise in planned spending. “However, we know that the activity did not slow down, which suggests that the costs and prices did not impact the decision to renovate on a larger scale in 2021,” Sargsyan says. “We have yet to see what happens in 2022. We are hearing from professionals in our community that the activity is likely to slow down in the next few months, while the spend will continue to increase slightly due to costs.”
Homeowners who will tackle higher-budget projects (those in the top 10% of spend) in 2022 plan to spend $75,000, up from $60,000 in 2021.
Additionally, nearly half of homeowners (46%) plan to decorate in 2022, while almost 3 in 8 homeowners are planning repairs.
Outdoor Renovations Dip, Interior Ones Step Up
Renovations to outdoor spaces hit a peak in 2020, with 57% of homeowners tackling an outdoor project. In 2021, that share dipped slightly, to 54%.
But the share of homeowners remodeling interior rooms rose from 68% in 2020 to 70% in 2021. Updates to home systems and home exteriors saw a similar percentage increase.
As mentioned, outdoor renovations hit a high in 2020. So while updates to yard beds and borders, the most popular outdoor project, dropped 7 points in 2021 compared with the previous year, the share of homeowners making these upgrades (28%) returned to the more stable level seen in 2019.
Outdoor lighting upgrades are also popular (22%). And the share of homeowners adding or updating security systems, such as installing cameras and sensors, has become increasingly popular over the years. In 2021, 17% of renovating homeowners took on outdoor security system projects, compared with only 6% in 2015. And homeowners spent 25% more on home security systems in 2021 than in the previous year.
How Long Does a Remodeling Project Take?
Despite what many TV shows convey, remodeling projects can take months to complete — sometimes over a year. On average, homeowners spent nine or more months on a renovation project in 2021.
A large portion of that time was spent planning. The planning phase for remodels of any interior room was nearly twice as long as the construction phase. For example, homeowners spent an average of 8.6 months planning a kitchen remodel, while the construction phase lasted on average almost five additional months.
Homeowners Rely on Pros More Than in Recent Years
Nearly 9 in 10 homeowners relied on a pro for their remodels or upgrades in 2021. They hired slightly more construction pros in 2021 (38%) than in 2020 (36%), as well as more design-related pros (20%) compared with the previous year (18%).
Recent homebuyers tackled more projects than those who’d been in their home a while, and hired more pros as a result — 93% of them brought on pro help, compared with 88% each for short-term and long-term homeowners.
Specialty service providers were the most frequently hired professionals. This group includes electricians, heating and cooling specialists, plumbers, painters, carpenters, tile workers, masons and countertop pros.
Among the 38% of homeowners who hired construction professionals, general contractors (72%) comprised the largest group, followed by builders (30%), kitchen and bath remodelers (18%) and design-build firms (8%).
Of the 20% of homeowners who hired design-related pros, interior designers (37%) were the most common, followed by architects (29%), landscape architects and designers (29%) and kitchen and bath designers (26%).
The three most commonly hired pros among the 49% of homeowners using specialty service providers were electricians (38%), air conditioning and heating specialists (37%) and plumbers (35%).
Who Stays on Budget and Who Doesn’t
Budgeting for a renovation project can be difficult. The volatility of material costs, surprise discoveries during construction and unplanned scope expansion all can affect a homeowner’s budget. With that in mind, 34% of homeowners went over their remodeling budget in 2021.
That said, two-fifths of homeowners (39%) came in at or under their budget, while 27% reported having no initial budget at all.
Recent homebuyers were more likely to go over budget (45% did so) than short-term (34%) or long-term (31%) homeowners.
Cash Falls, Credit Rises
Cash from savings remained the top method of financing renovation projects in 2021, with 76% of homeowners choosing it. But that’s a 7-point drop from the previous three years, when 83% of homeowners used cash.
Funding with credit cards increased. The share of homeowners financing projects with credit cards rose 6 percentage points, to 35%, in 2021 compared with the previous year.
Recent homebuyers were the most likely to rely on cash from a previous home sale in 2021. And long-term homeowners were the most likely of the three groups to use a secured home loan (17%).