2022 Home Improvement Report – NerdWallet

- Advertisement -


American homeowners spent more than half a trillion dollars on home improvement projects in recent years, but they say inflation and a potential recession will be factors in how much they spend going forward.

- Advertisement -

According to the most recent US Housing Survey from the US Census Bureau, from 2019 to 2021, US homeowners started nearly 135 million home improvement projects, spending an estimated $624 billion. This is an increase of nearly $100 billion in home improvement spending compared to the previous survey period (2017-2019).

- Advertisement -

This two-year period began before any of us knew the COVID-19 pandemic was coming, and has spread through lockdowns and ambitious stuck-at-home DIY projects and into a housing market where Homes – even those dilapidated – were selling for one. Peppermint. Any of these factors can affect how people spend money to improve their homes. There is no doubt that each of them did.

“The pandemic started a lot of home improvements,” says NerdWallet home and mortgage expert Holden Lewis. These developments led to renovations, whether to make homes more livable or to prepare them for sale.”

- Advertisement -

In this third biennial NerdWallet home improvement report, we analyze the latest American Housing Survey data from 2019 to 2021, when homeowners were asked about their projects during the “past two years” between May 3 and September 30, 2021. I was asked. We combine this with the findings of a nationally representative NerdWallet survey conducted online by The Harris Poll on September 27-29, 2022, which asked 1,404 homeowners about their home improvement activities and sentiments.

Here’s what’s inside this year’s report:

key findings

Home improvement projects and spending increased significantly. The number of home improvement projects increased by 17% to 134.8 million in the 2019-2021 period. According to data from the American Housing Survey, spending rose 20 percent to $624 billion.

Homeowners DIY’d nearly 53 million of their projects. Do-it-yourself or DIY projects accounted for 39% of total projects and 20% of total spending over the two-year census survey period.

The share of homeowners who can “easily” pay for the improvements has decreased. Less than half (42%) of people who have worked on home improvement projects in the past two years say they can get to most of them without tapping into savings, going into debt or making sacrifices, according to a recent NerdWallet survey. Was able to pay easily. This is less than the 52% who said the same thing when asked in 2020.

Most of the planned improvements are not targeting potential home buyers. Only 20% of homeowners considering home improvements in the next two years say the goal is to make their home more attractive to potential buyers. Instead, according to the survey, the most cited reasons include making it more comfortable (54%) and feeling more satisfied with it (52%).

Upcoming projects may hinge on the economy. While homeowners anticipate spending an average of $7,746 on home improvement projects over the next two years, inflation (44%) and whether or not we’re in a recession (27%) are some of the economic factors that will play a role. role in many of their decisions, the survey found.

home improvement status

Homeowners spent $624 billion on home repair and improvement projects during the two-year period covered by the 2021 American Housing Survey. That’s more than doubled to nearly $300 billion in just a decade.

Taking current inflation into account, it would be easy to write this increase off as a case of higher costs, but it is not: the number of projects during this period increased from about 94 million in the 2013 survey to 134.8 million in 2021. increase 44%.

From the 2019 Census survey to the 2021 survey, total projects increased by 17% and spending increased by 20%.

Projects cost an average of $4,838 during the 2021 survey period. The most expensive of them was kitchen renovation, which cost an average of $33,190, while the cheapest was security system installation, which averaged $754.

At the beginning of the pandemic, when people were newly locked in their homes, home improvement projects exploded. But before that and after people returned to work, that action slowed down.

In fact, when we asked homeowners in September 2020 about their home improvement projects over the past two years, 26% said they worked on such projects because they were at home due to social distancing measures related to the pandemic. were spending more time. This year, only 17% of homeowners say they worked on home improvement projects in the last two years because they were spending more time at home due to pandemic-related issues.

Handy Homeowner Tip: Home improvement projects aren’t necessarily the same projects you’d tackle during a typical weekend when you’re spending more time at home. A week or three at home can be a great time to update your bathroom—it can even be an enjoyable project—but finding the time to do repairs and maintenance can be more difficult and less exciting. Make sure you are setting aside money and time for these more mundane activities. While you may not beam with pride when you walk by your clean gutters, clearing blockages caused by rainwater damage is a small project that could save you money for as long as you own your home. .

DIY Vs. Supporter

According to our survey, one in 4 homeowners (25%) say they have worked on DIY home improvement projects in the past two years because they enjoy this type of work. But that wasn’t the only motivation for picking up power tools — 15% of homeowners say they took on DIY projects during that period because they couldn’t afford to hire a professional, and 9% say they did. Did it because they couldn’t find a contractor to do the work for them.

The Census survey shows a slight increase in the share of DIY projects, possibly due to closures due to the pandemic in 2020.

In the most recent Census survey period (2019-2021), nearly 53 million, or 39%, of home improvement projects were DIY, compared to 37% in the previous two-year period. Spending on these projects was 20% of the total amount spent on home improvements during the two-year period. The average amount spent on a DIY project was $2,500, versus $6,350 on a professional job.

Handy Homeowner Tip: “Doing your own home improvement work can save you some money, but don’t get overzealous,” cautions Lewis. “Taking a hammer to a wall on your own can be fun and cheap, but finding out after the fact that it was a load-bearing wall cost you a bundle when it came to comic relief on a home renovation show.” Can make you feel like.”

pay for

According to a recent NerdWallet survey, just under half (42%) of homeowners who worked on home improvement projects in the past two years say they could easily pay for most of them without saving, going into debt, or making sacrifices. were capable of. , This is less than the 52% who said the same thing when asked in 2020.

But these projects can be costly, and 20% of homeowners who worked on such projects in the past two years had to make sacrifices such as cutting back on discretionary spending or selling items, 14% had to tap into or eliminate emergency savings. , 12% had to take on debt such as loans or credit card debt, and 8% borrowed against the equity in their home to pay for the majority of the work.

Cash is king when it comes to home improvements – 78% of projects during the Census survey period were paid for primarily with cash, according to the 2021 American Housing Survey. But few homeowners have a deep well to draw from, so funding options change as projects become more expensive.

Handy Homeowner Tip: Approach your choice of home improvement funding carefully. Cash doesn’t cost anything in the form of interest, but it can mean draining your savings. Other forms of credit – credit cards, home equity financing options and personal loans, for example – all come with interest, fees and variable repayment terms. Ideally, you have saved up front and can fund your project in a lump sum. But if it is not, choose your funding option after considering all the costs and benefits.

What to Expect: Upcoming Projects

According to a NerdWallet survey, nearly all (95%) homeowners are considering home improvement projects in the next two years. And while many of them are planning smaller projects — 42% are considering painting a room and 25% updating light fixtures — nearly half (51%) say they’re considering renovating a room. Thinking of renovating or adding on? Nearly a quarter (22%) are considering renovating a kitchen, while a similar percentage (22%) are considering renovating or adding a bathroom.

When asked why they’re considering taking on these projects, just 1 in 5 (20%) of those considering home improvement projects in the next two years say it’s because they’re the best option for potential buyers. To make the house more attractive. Meanwhile, 54% say it is to make their home more comfortable for them and their family, 52% say it is to feel more satisfied with their home and 33% say their home requires an update to be secure or functional.

For inspiration on their home improvement projects, 40% of homeowners say they look at online content more than any other source.

Cost and Economic Considerations

According to the NerdWallet survey, homeowners estimate they will spend $7,746 on home repairs and improvement projects over the next two years, with an average of nearly a quarter (24%) expecting to spend $10,000 or more. That’s more than the average anticipated spending of $6,251 when we asked in 2020.

But given the current state of the economy, they know there are certain things to contend with, factors that may affect their ability to spend on projects or complete them. When asked what factors will play a role in their decision on whether and when to undertake projects in the coming two years, 44% of landlords cite inflation, 38% ability to buy supplies, 30% to work The ability to find a contractor, 30% of the housing market and 27% of whether or not we’re in a recession.

Many (39%) plan projects in the next two years that they expect to save money specifically for, and nearly one-third (34%) plan to use a credit card.

Millennial homeowners (ages 26 to 41) who plan to spend money on home repairs and improvement projects in the next two years are more likely than other generations to say they intend to use a credit card: 45% versus 32% of Generation Z (ages 18–25), 32% of Generation X (ages 42–57) and 28% of Baby Boomers (ages 58–76).

“Many homeowners are going to stay in their current homes longer because they don’t want to be stuck in their home with a higher mortgage rate,” says Lewis. Instead, the owner would remain. ‘Move on’ by making improvements to your current homes. When they do, they will be doing themselves a favor by finding the most cost-effective way to pay.”

The survey was conducted online by The Harris Poll on behalf of NerdWallet from September 27-29, 2022 among 2,047 US adults ages 18 and older, including 1,404 homeowners. The sampling accuracy of Harris Online polls is measured using Bayesian credible intervals. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For full survey methodology including weighting variables and subgroup sample sizes, contact Alike Wood [email protected]

The American Housing Survey is released every two years. For the latest release, interviews took place between May 3 and September 30, 2021, and asked homeowners about home improvement projects they had done in their home “in the past two years.” The respondents interpreted it as from January 2019 or mid-2019.

The AHS asks homeowners to self-report what they spent on projects in various categories. In addition to defining remodel versus renovation, the survey does not separate projects by scale, scope, quality of materials or finishes.

The AHS data used in this report is specific to owner-occupied households.

AHS measures project expenditure. For the purposes of this analysis, the terms project “cost” and “expense” are used interchangeably.



Source link

- Advertisement -

Recent Articles

Related Stories