Kitchens remain the most popular room to renovate and the costs of such renovation projects increased 27% in the past year, according to the eighth annual Houzz & Home Survey. Based on the responses of more than 140,000 users, Houzz estimated the median investment on kitchen renovations nationwide increased to $14,000, much larger than the modest 10% increase the same survey found in 2017.
Median spending on guest and master bathroom remodels, the second and third most popular projects, grew 17% and 14%, respectively, from 2017 to 2018.
“Last year's 10% increase in tariffs on imported building materials is likely one of several forces hitting consumer pockets in areas such as kitchen and bathroom remodels that are heavily dependent on imports of cabinetry, countertops, ceramic tile, plumbing fixtures and vinyl flooring from China. We expect similar effects to take place in 2019 given the recent breakdown in trade negotiations,” said Nino Sitchinava, Houzz principal economist.
The report found overall renovation activity remained strong through 2018. The median total spend on renovation projects in 2018 was $15,000, consistent with findings from the previous two Houzz & Home Surveys. The share of homeowners taking on improvement projects of less than $5,000 increased 3% from 2017. Homeowner projected spending increased an average of $10,000 in 2019.
Fifty-seven percent of respondents indicated “wanting to do it all along” was the impetus for taking on a home improvement project in 2018, the top trigger for remodeling. Wanting to address damage—either due to a home’s age or a natural disaster—was also a major driver of home renovations in 2018. Nearly three in ten renovating homeowners reported damage from a plumbing malfunction, a natural disaster, or another event in the past five years.
Baby boomers—homeowners between the ages of 55 and 74—and Generation Xers—homeowners between the ages of 40 and 54—accounted for 81% of the renovation market in 2018 with a median spend of $15,000, according to Houzz. Millennials—homeowners between the ages of 25 and 39—accounted for 14% of the renovation market while Generation Zers—homeowners between the ages of 18 and 24—entered the home improvement market for the first time, accounting for 0.3% of the market in 2018.
Local Markets in Flux
Half of the largest metropolitan areas in the U.S. by population saw a decline of median spend in 2018, according to Houzz. Seven of the top 10 cities with the highest renovation spend in 2017 experienced declines in 2018, including Boston, Houston, Texas, Miami, and San Jose, Calif., while only six of the top 50 metro areas saw increases in median renovation spend year over year. San Francisco, Calif., and San Jose, Calif., were the two metros with the largest renovation spend nationally in 2018, consistent with the past two years. Houzz also found that homeowners in major metros by either coastline spend significantly more in renovations compared with the median national level.
Professional Help
More than four in five renovating homeowners hired professional help for projects in 2018, consistent with the previous two years of the study. More than half hired a specialist, such as an electrician or plumber, while 36% hired a construction manager. More than a quarter of renovating homeowners hired general contractors in 2018. Baby boomers were slightly more likely to hire professional help than Millennials, but both groups would hire help more than 80% of the time.
Security Demands
Security upgrades continue to gain popularity with renovators, with the segment experiencing an average annual growth of 20% over the past three years. Outdoor security also saw gains in popularity, growing nearly 50% year over year. One in seven renovating homeowners integrated smart outdoor security cameras that could be controlled by a mobile device. Millennials are the most likely generation to upgrade security systems during renovations.
The Houzz & Home Study released by Houzz compiled answers from 142,259 respondents in the U.S. with Houzz profiles. The 160-question survey was distributed to users between February 13 and April 16, 2019, and collected data on historical and planned spends, professional involvement, motivations and challenges behind projects, and planned activities for 2019.
