New Study Shows First-Time Homeowners Are Investing In Renovation Projects

Houzz | May 13, 2017 | Content For Agents

Note from the editor: Houzz is an amazing resource for those looking to update their home, do some decorating, and prepare their home for sale. You can share these these articles with your clients who are looking for ways to fix up their home to help it sell. We appreciate Houzz for providing us with this guest post.
By Erin Carlyle, Houzz

Renovation spending among younger homeowners is on the rise amid a strong renovation market, a new Houzz research report reveals. Among the report’s key findings: Younger homeowners and first-time buyers are driven at least in part by a desire to customize their homes.

The 2017 Houzz & Home survey gathered information from close to 107,000 registered users of Houzz, including nearly 56,000 homeowners who renovated in 2016. Read on for more insight into how homeowners are renovating, how much they are spending and why they choose to renovate.

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Millennial spending is up. Homeowners spent an average of $60,400 on their renovations in 2016, close to their average spend of $59,800 in 2015, the Houzz survey found.

Notably, millennial homeowners (defined here as those ages 25 to 34) invested 7 percent more in their home in 2016 compared with 2015, bringing their average spending level to $26,200.

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First-time buyer spending is up too. First-time buyers also bumped their spending level last year, averaging $33,800, up 22 percent from 2015. By contrast, long-term owners saw just a 3 percent rise in average spending year over year (YOY).

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Older homeowners spend more. While younger and first-time buyers are trending upward in their spending, older homeowners still spend far more on their home renovations than the younger group. In fact, those ages 55 and older spend about three times the amount of those ages 25 to 34.

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Recent buyers renovate more rooms. Recent home buyers tend to renovate more rooms in their new homes, on average, than long-term homeowners do.

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Why people decide to renovate. The top triggers for starting a renovation project in 2016 were finally having the time, cited by 37 percent of homeowners who renovated, and finally having the money, cited by 36 percent.

Another big motivator was purchasing a new home and wanting to customize it, cited by 27 percent of participants.

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Buyers want to customize. The survey data shows that both first-time and repeat home buyers are very likely to start a renovation out of the desire to customize their home. Long-term owners, by contrast, are more likely to start a project because they discover damage.

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Plastic gains popularity. Slightly more homeowners used credit cards to fund their renovation projects compared with the year before. Overall, 23 percent of homeowners used credit cards for renovation work in 2016, compared with 21 percent the year before.

Among first-time home buyers, credit card funding is especially popular — 39 percent used plastic to pay for their projects.

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Kitchen remodels average $19,100. Remodeling a kitchen is among the most popular renovation projects, and the average homeowner spend for doing so stayed steady year over year, at $19,100 for renovations in 2016, compared with $18,900 in 2015.

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Master bathroom remodels average $11,700. Similarly, the average price tag for master bathroom renovations rose to $11,700, a small uptick from the prior year’s average of $11,300.

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A year from start to finish. Planning an interior remodel takes an average of four to eight months, according to the survey, with kitchen planning being the most lengthy process, at an average of 7.7 months. Construction averages 2.5 to five months. In total, an interior remodel project averages about a year from planning to completion.

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Kitchen, bathrooms and living rooms top the list. Kitchens, bathrooms and living rooms remain the top priorities for homeowners who are renovating, the survey found. For first-time buyers, master bedroom remodels are particularly important. Master bedrooms are their third most frequent renovation, and twice as likely to be tackled by first-time buyers compared with long-term owners.

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Three rooms at a time. Three in four of renovating homeowners tackle interior rooms, and on average they address three rooms at a time. More than half of renovators take on home systems such as HVAC.

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One-fifth choose home automation. Home automation systems, such as smart thermostats and lights, and security upgrades, such as alarm systems and cameras, increased in popularity relative to 2015. One-fifth of renovating homeowners choose these changes, with recent buyers twice as likely to install these systems as long-term owners.

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Beds and borders, decks, and lighting are popular. In terms of outdoor upgrades, one-third of renovating homeowners choose to upgrade beds and borders. Decks are the most popular outdoor structures, chosen by 14 percent of renovating homeowners. Lighting upgrades are chosen by 16 percent of renovating homeowners, with repeat buyers the most likely to prioritize outdoor lighting.

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We all need a little help sometimes. Renovating homeowners are increasingly turning to pros for help, with 87 percent hiring a pro during the course of their renovation in 2016, up from 85 percent in 2015. Repeat home buyers hire pros in the greatest numbers.

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Budgetary matters. The No. 1 renovation challenge, cited by 36 percent of homeowners who renovate, is staying on budget. Finding the right products and materials was the second most common challenge, followed by finding the right service providers.

The Houzz & Home survey was fielded from February to April 2017 and gathered responses from 106,678 registered Houzz users. The report relies on the subset of responses from 95,920 U.S. homeowners, and 55,687 U.S. homeowners on Houzz who renovated in 2016.

See the full 2017 Houzz & Home report

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