Home renovation spend on the rise, according to Houzz & Home survey

In its 10th annual Houzz & Home survey, Houzz found that home renovation has grown 15% in the past year, with kitchens, outdoor spaces, home offices and technology getting the most attention.

And the increase in renovation is only expected to continue, with 56% of the homeowners surveyed planning some type of renovation project in 2021, the highest percentage since 2017 at 52%.

In 2020, the survey shows that the median home renovation spend was $15,000, and higher budget projects saw an increase from $80,000 per project in 2018 and 2019 to $85,000 last 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,” said 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.”

The reasons for the increase in home renovation are varied: 44% said they finally had time for the project; 36% said they finally have the financial means; 25% decided to renovate rather than move; and 18% said they remodeled to adapt to a recent change in lifestyle.

While Baby Boomers have historically been the leader in both renovation activity and spend, Gen Xers narrowed the gap in 2020. Last year, Baby Boomers (52% of renovating homeowners, down from 55% in 2019) spent a median $15,000, while Gen Xers (32% of renovating homeowners, up from 30% the previous year) increased their spend by $2,000 to a median $14,000.

Millennials, who continue to represent 12% of renovating homeowners, remained unchanged at a median of $10,000 per project.

Where were the renovations?

While interior room remodels remain the most common projects (68%), outdoor areas continue to increase in popularity, up to 57% in 2020. The most popular projects included landscaping and upgrades to decks, porches or balconies.
Homeowners also stepped up their remodeling investment in smaller areas of the home that may have once been considered a luxury and are now a necessity. Demand for home office projects increased by four percentage points to 14% of the projects and spending on those projects increased by 10% in 2020, to a media of $1,100.
Smart home technology continues to gain popularity, with items such as streaming-media players and TVs seeing the greatest increases. However, a larger share of renovating homeowners opted for smart products for their outdoor spaces, with 19% choosing security cameras, 7% adding light fixtures and 3% adding speakers or sound systems.
87% of those surveyed hired professional help for their renovation projects in 2020, often engaging more than one professional per projects. While specialty service providers were the most common (49%), construction (36%) and design-related professionals (18%) were important as well.
And where were homeowners spending the most? San Jose, Calif., leads the list of top 10 metropolitan areas with the highest median spend on renovations in 2020 ($30,000), maintaining top position since 2017. Homeowners in California and Florida — San Francisco ($21,250), Los Angeles ($20,500), San Diego ($20,000) and Miami ($20,000) — made up the list of top five metro areas by renovation spend in 2020.

About the survey

The 2021 study includes more than 70,000 respondents in the U.S. alone, providing insights into the home improvement activity of the millions of users of the Houzz site and mobile apps.

The Houzz & Home Survey was sent to registered users of Houzz and fielded April-May 2021.

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