Homeowners spend more on kitchen remodels in 2018
Spending on kitchen remodels was up considerably between 2017 and 2018, according to an annual survey by the home design site Houzz.
In its eighth Houzz & Home survey, which polled 128,362 respondents in the United States who completed a home renovation in 2018, homeowners who remodeled a kitchen said they spent a median of $14,000 on the job. This was up 27 percent from 2017, when the year's survey reflected a 10 percent increase in median spending on kitchen remodels.
The kitchen was the most popular remodeling job, completed by 30 percent of respondents, followed by guest bathroom (27 percent) and master bathroom renovations (23 percent).
Median spending was up in these rooms as well, with a year-over-year increase of 17 percent for guest bathroom work and 14 percent for master bathroom work. The median spend was $3,500 for a guest bathroom and $8,000 for a master bathroom.
"Last year's 10 percent increase in tariffs on imported building materials have started to hit 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," said Nino Sitchinava, principal economist at Houzz. "We expect similar effects to take place in 2019 given the recent breakdown in trade negotiations."
The median homeowner spent $15,000 on renovations in 2018 and expected to spend $10,000 on home improvement projects in 2019. Nineteen percent said they spent less than $5,000 on this work in 2018, up from 16 percent in the previous year.
In 2018, homeowners renovated an average of 2.8 interior rooms and upgraded an average of 2.7 home systems, such as HVAC or electricity. Homeowners also completed an average of 2.4 improvements to the exterior of their property.
Despite the higher costs, remodeling activity remained strong among homeowners. Fifty-four percent of respondents said they have done work on their home in 2018, at a median cost of $15,000. Fifty-one percent said they are planning to remodel in 2019, expecting to pay a median of $10,000 for the work.
Baby boomers and Generation Xers, defined as those ages 55 to 74 and 40 to 54, respectively, made up 81 percent of renovating households and spent a median of $15,000. Millennials, or those ages 25 to 39, accounted for 14 percent of renovating households with a median spend of $10,000. Generation Z (ages 18 to 24) represented just 0.3 percent of renovating households in the survey and spent a median of $7,000 on this work.
Fifty-seven percent said they had always wanted to renovate their home and finally had the time or financial means to do so. Twenty-six percent wanted to customize a recently purchased home, while 22 percent needed to repair damage and 16 percent needed to adapt to recent changes in their lifestyle.
Forty-eight percent said they opted to update the home instead of move to another residence because they wanted to stay in their current property, while 46 percent wanted to personalize the home and one-third said they wanted to stay in the same neighborhood. Economic considerations also played a significant role in the decision, with 28 percent saying renovating was more affordable than moving and 24 percent saying renovating was a better return on investment.
Household tenure also influenced why a respondent decided to renovate their home. Among those who had lived in their home for six years or longer, 61 percent said the remodel aimed to help them stay in their current home. Fifty-six percent of those who had lived in the home for less than a year said they wanted to renovate the property in order to personalize it.
Eighty-eight percent said they wanted to improve their home's design, while 81 percent wanted to improve its functionality. Sixty-seven percent hoped the renovations would boost the home's resale value, while 63 percent wanted to minimize home expenses and 62 percent wanted to make their home more energy efficient.
Respondents were increasingly likely to finance renovations with a credit card, although the majority—83 percent—continued to pay for the work from cash they had saved up. Thirty-seven percent charged the expense, up from 33 percent in 2017. Younger homeowners were more likely to rely on this method, while older ones were more likely to use a secured home loan or proceeds from the sale of a previous home.
Most homeowners—87 percent—hired a professional to complete the renovations on their home. General contractors were the most common hire, with 26 percent bringing in this type of business.
Younger homeowners were more cognizant of smart home technology, with 31 percent ranking this as a high priority; one in four baby boomers felt the same. Millennials were twice as likely as baby boomers to install a smart thermostat as part of their renovation, with 24 percent doing so. Overall, one in five homeowners bought a smart home assistant to pair with smart technology installed during the renovation, while 17 percent put in smart light fixtures and 13 percent installed smart alarms or detectors.
Houzz said investment in security features has grown by 20 percent in the past three years, with the median homeowner spending $500 on this type of improvement. Twelve percent of homeowners installed an outdoor security system in 2018, a year-over-year increase of 50 percent. Overall, 14 percent put in security cameras that can be monitored on a smartphone.
Seventy percent of homeowners who renovated their property also updated their furnishings or home décor as part of the process. Younger homeowners were more likely to take this step, with 83 percent doing so compared to 65 percent of baby boomers.
Thirty-two percent said finding the right service providers or staying within their budget were challenging parts of the remodel, while 31 percent said finding the right products was difficult. Twenty-two percent said it was challenging to stay on schedule or deal with unexpected factors.
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