Renovation spending has jumped 60% since 2020

by Emily Marek

Renovation spending has surged since the onset of the pandemic, according to the 2024 Houzz & Home Study from home renovation and design company Houzz.

In 2020, median renovation spending was $15,000. That amount increased by 60% in three years, with the median home renovation costing $24,000 in 2023. Furthermore, 51% of renovators spent $25,000 or more last year, up from 37% in 2020.

“Despite prevailing economic headwinds, such as high interest rates and persistent inflation, investment in home renovations continued in 2023,” Marine Sargsyan, Houzz staff economist, said in a press release. “The increase in spend and shift to larger-budget projects is likely driven by rising product and labor costs.”

That makes sense, considering that while the amount homeowners spend on renovations has increased, the number of homeowners undertaking renovations has actually decreased: 56% of homeowners took on renovation projects in 2023, down from 58% in 2022.

Cash from savings continues to be the main way homeowners fund their renovations, at 83%. Credit card spending is the second-most common source of funding, at 37%, up from 28% in 2022. The most popular purchase for home renovations in 2023 was paint, with 64% making the purchase, followed by light fixtures at 52% and new faucets or shower heads at 49%. Major kitchen appliance purchases dropped by 4%, with only 32% of renovating homeowners opting to swap features like dishwashers, fridges or ovens.

That being said, the most commonly renovated room in the house was the kitchen, with 29% of renovators opting to redo the space. That’s closely followed by guest bathrooms at 27% and primary bathrooms at 25%. However, the average homeowner takes on approximately three interior room upgrades and two or more outdoor projects during the typical renovation.

Following 2022 trends, Gen X homeowners spent the most on renovation projects last year with a median spending of $25,000. In comparison, the median baby boomer spent $24,000. These two generational groups continue to drive renovation spending — while Gen X spent the most money last year, Boomers took on 56% of all home renovations. Millennials trailed by a large margin, making up only 9% of all renovations and spending a median of $20,000.

Despite generational differences in spending, nearly all renovating homeowners hired professionals to get the job done, at 91%. The average renovating homeowner enlisted 1.7 service professionals in 2023, the same as 2022.

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