2018 Home Renovation Report: Homeowner Trends, Spending and Priority Projects
CURRENT ECONOMIC OUTLOOK
Overall, U.S. homeowners are optimistic about the next twelve months. 60% of homeowners take the state of the economy into consideration before making renovation plans, and 61% feel confident the economy is improving. Additionally, 55% of our respondents think home values will increase as well over the next year. While President Trump can be a controversial topic, only 28% report taking the presidential administration into consideration before making home improvement plans.
FUTURE HOME RENOVATION SPENDING
Homeowners look to be encouraged by today’s stronger housing market, and are making investments in their homes. 55% of homeowners plan to conduct at least one renovation over the next twelve months, up from the 38% who have previously performed improvements. 41% of respondents are initiating a home improvement project to improve their quality of living, while 17% are looking to increase the value of their home, but don’t have current plans to sell, and 16% want a “new look”.
Homeowners are also tackling bigger, more expensive projects this year-15% are planning to remodel their kitchen this year, 13% plan to update a bathroom, and 9% are looking to revamp the bedroom. 42% plan to spend between $3,000 and $10,000 on their upcoming renovation, up 6% from last year. A bit of good news for contractors: 61% plan to hire a professional for their upcoming project, compared to 59% who hired a professional for their past project. 49% of respondents plan to pay with cash or savings, 17% will put it on a credit card, 14% will use financing, 10% plan to use a home equity loan, and 8% are counting on their tax return to finance their project.
MILLENNIALS VS. BABY BOOMERS: WHO IS SPENDING ON HOME IMPROVEMENT?
Baby Boomers and millennials have at least one thing in common when it comes to conducting home projects: 61% of both baby boomers and millennials plan to perform at least one improvement over the next twelve months. That may be where the similarities end, however. The majority of millennials (35%) plan to spend between $1,000-$2,999, while 31% of baby boomers will be spending between $5,000-$9,999. Baby boomers will primarily be paying with cash (67%), financing (13%), or taking out a home equity loan (7%). Millennials will also be paying with cash (42%), but 19% plan to use one or more credit card.
Millennials are focused on renovating their kitchen (14%), bathroom (10%), and living room (9%), while 23% of baby boomers will be updating their bathroom, kitchen (19%), or replacing windows (9%). The majority of both age groups will be hiring a professional to do the work, but 39% of millennials plan to conduct the renovation themself, compared to 27% of baby boomers. Millennial respondents get a sense of satisfaction from performing the work themselves (40%), while baby boomers are more focused on keeping the project cost effective (59%). Baby boomer DIY-ers are also very specific about where they purchase their materials, with 85% shopping at building supply stores such as Home Depot, Lowe’s or Menards, hardware stores like Ace Hardware or True Value (8%) or Walmart (8%). Millennials also shop at supply stores (64%), Walmart (14%), and hardware stores (7%), but they frequent warehouse clubs like Costco or Sam’s Club (7%) and high-end specialty stores like Kohler (4%) as well.
WOMEN TAKING CHARGE OF HOME PROJECTS
While home improvement has stereotypically been thought of as a male-dominated industry, women are picking up power tools and narrowing the margins. Of our respondents, 55% of women are planning to conduct a home improvement project over the next twelve months, compared to 57% of men. The majority of men (33%) intend to spend between $5,000 and $9,999, while 29% of women are looking to spend $1,000-$2,999. Cash is king for women funding their project; 54% of women are using cash, whereas men will be using cash (40%) or financing (21%). The genders are focused on improving different areas of the house as well; men will be remodeling the bathroom, while women plan to update the kitchen.
The majority of both sexes-63% of women and 58% of men-intend to hire a professional for their upcoming project. 56% of women feel they do not have the skills or equipment necessary for their planned project, while men value the expertise that comes with hiring a professional (47%). Another dissimilarity between the genders is how they find professionals to hire. Women prefer to ask a friend for a referral (40%), look on a review website such as Yelp.com (18%), or ask a contractor for a referral (17%). Men also ask friends for referrals (30%), but would rather use a search engine like Google.com (24%), or look on Yellowpages.com (21%).
The motivated women who plan to DIY prefer it because it gives them a sense of personal satisfaction (41%), whereas DIY men like that it’s more cost effective (53%). The majority of both men (74%) and women (75%) plan to purchase materials at a building supply store like Menards, Home Depot or Lowe’s, but that’s where the congruity ends. 10% of men intend to shop at Sears or IKEA (6%), while women will head to warehouse clubs like Costco (8%) or Walmart (8%).
THE YEAR AHEAD
The current housing market inventory is very competitive, so it is logical that many homeowners are choosing to invest in remodeling their current home, rather than get into a bidding war. Additionally, with the economy and housing market more stable, homeowners now have more income-and equity-so they’re making renovations to create their dream homes. Our study found that the majority of homeowners are focusing on discretionary projects such as kitchens and bathrooms, which may have been put off after the housing crisis. Judging from our report, it looks like 2018 will be a profitable year for homeowners, contractors, and material suppliers alike.