Report: Home improvement spending continues to increase

Home Improvement
istock.com/eclipse_images
DENVER — HomeAdvisor’s 2020 State of Home Spending Report: The Year of the Home confirms that as Americans spend significantly more time in their homes, they are rethinking spaces and spending more on home improvement.

“This year, we found, in our annual survey, the average home services spending for households who took on projects rose to $13,138, an increase over last year’s survey results, where homeowners who did projects spent $9,081 on average,” said Mischa Fisher, chief economist at HomeAdvisor.

“This year’s topline growth in spending and projects is a story of increasing costs of supplies, increasing cost of labor and homeowners shifting spending from things like entertainment and travel to their homes,” continued Fisher. “While the cost to do projects compared to last year did increase, we also found that homeowners were spending more as well. The acceleration of home buying this year and underlying drivers of consumer spending like shifting demographics, baby boomers renovating to age-in-place, millennials changing needs to raise their growing families, a greater cultural focus on home design and home entertainment, an aging housing stock and a shortage of new home construction – among many other fundamental factors—were already resulting in more spending on home improvement, home maintenance, and home emergency repair and also continued this year.”

Homes have always been important, but the once in a century global pandemic has fundamentally shifted the relationship we have with our homes. Those factors, combined with a shifting range of needs for households as a result of coping with COVID-19, such as 27% more outdoor living needs, 40% more home entertaining, 50% more working from home, and 68% more home cooking, resulted in a shift in spending patterns, with 33% shifting commuting budget, 48% shifting vacation budget, and 52% shifting restaurant budgets into home services.

- Sponsor -

Additional insights include:

  • The top three completed home projects are bathroom remodels, interior painting, and installing new flooring.
  • The top reason for home improvement spending was to make the home better suit lifestyle needs, 41% of all consumers surveyed. This stands in contrast to 2019, where the number one reason was to replace or repair a damage, defect or decay, suggesting that COVID-19 is impacting people’s lifestyles.
  • Despite strong spending trends, 30% of projects were not started or completed as result of COVID-19.
  • 85% of Americans are spending more time at home as a result of COVID-19, with 67% spending significantly more time at home, resulting in 63% noticing more areas in need of improvement around their homes.
  • 68% of people are doing more home cooking as a result of COVID; 52% have shifted some of their restaurant spending into home improvement projects; and a kitchen remodel is the most desired home improvement project, with 27% of people saying they would remodel their kitchens if given $10,000 for home upgrades.
  • 71% of people want to see COVID-related business updates from home professionals, and 73% say that knowing a home service professional shares COVID-related information and actively promotes safety measures will influence their hiring decisions.
  • The number one reason for projects to go over time or over budget was products or materials taking longer than expected to arrive, with 24% of respondents listing this as the primary reason for delayed or over-budget projects.

This report also found many generational trends, fueled by the onset of the COVID pandemic, including a focus on home services by millennials.

“Millennials are spending the most on home improvement projects this year,” said Fisher. “On average, millennial households spend or plan on spending nearly $10,000 on home improvement projects this year. Homeownership rates for millennials have jumped significantly, especially as COVID-19 has reemphasized the importance of the home and many companies move to flexible work location options. Millennials are not only rapidly becoming homeowners, but they are also spending more on home improvement than any other generation when they do.”

The report is informed by HomeAdvisor’s True Cost Guide, an online guide for homeowners to access real costs as reported by consumers for home projects, as well as results from an annual survey conducted among homeowners.

Stay Updated

Get our email newsletter with LBM industry trends, data, new products, and best practices.