U.S. homeowners optimistic about local housing markets, home values
With the exception of Millennials, the majority of U.S. homeowners (66 percent) who are remodeling plan to stay in their home for the long term, according to the third annual Houzz & Home survey with more than 135,000 respondents in the U.S. among the 190,000 respondents globally. Fifty-three percent of U.S. homeowners say they are remodeling to increase the resale value of their home but have no plans to move in the next five years, and just 16 percent plan to sell their home in the next two years. While homeowners remain cautious about the economy, three quarters (74 percent) said their local housing market has improved, and there was a significant drop in the percentage of homeowners who said funding their renovation project or staying on budget was a challenge this year (19 percent versus 27 percent in 2013). Those who report a significantly improved local housing market are more than twice as likely to be planning to remodel (42 percent) than they are to move (16 percent) in the next two years.
Among those planning to remodel, one in five (22 percent) feel that prices are rising too fast to consider moving at this time, and a quarter (24 percent) would prefer to move but say remodeling their home makes more economic sense. When it comes to buying a home, high home prices are particularly prohibitive for homeowners in the West (26 percent) with San Jose, CA and San Francisco, CA topping the list at 39 percent and 36 percent, respectively, as well as for single homeowners (29 percent). Millennial homeowners are more likely than other age groups to aspire to move to a new home in the next five years, and 36 percent of them are remodeling to increase home value with an eye on moving to their next home. Only a quarter of respondents in all other age groups are similarly motivated.
Cash remains the dominant source of financing across all age groups and areas of the country, with 80 percent of homeowners saying they paid for their last remodeling project out of pocket. Millennials were more likely to borrow from friends and family to pay for their recent project compared to other age groups (four percent versus one percent, respectively), and are more likely to have used a credit card (30 percent) to finance their last remodeling or building project than other age groups (21 percent).
“The investment that people make in their homes is not only a financial one, it’s also a very emotional one,” said Liza Hausman, vice president of Community for Houzz. “Rather than opting to move, the majority of Houzz homeowners undertaking renovation projects are choosing to do so because they want to stay in their home, not because they can’t afford to move. Significantly more homeowners on Houzz are able to fund their remodeling projects this year compared with last year, and we see them investing to create a home that meets their needs now and for the long-term.”
Bathrooms and kitchens are the most popular renovation projects again this year, with 26 percent of respondents planning a bathroom remodel or addition, and 22 percent planning a kitchen remodel or addition in the next two years. Kitchens continue to receive the highest share of dollars overall with U.S. homeowners spending an average of $26,172* to remodel this space. Homeowners in the Northeast and West, who tend to spend more on their renovation projects and have larger project scopes overall, spent an average of $32,155 and $29,411, respectively on their kitchens (versus $23,946 in the Midwest and $21,894 in the South). The study also found that homeowners are ‘doing more with less,’ with 76 percent saying that they retained their home’s existing footprint in their last remodeling project. Those with homes larger than 4,000 sq. ft. are are twice as likely to make additions of 1,000 sq. ft or more (10 percent versus 5 percent, respectively).
When it comes to replacement projects, flooring/paneling/ceiling are most popular at 27 percent, followed by windows/doors (22 percent) and roofing (15 percent).
Other Key U.S. Findings:
- From initial research to the start of construction, homeowners spend six months to a year planning for big ticket renovations projects including custom home builds (12.6 months), complete home remodels (9.7 months) and kitchen remodels/additions (8.3 months)
- Top challenges for homeowners renovating are finding the right products (39 percent), defining their style (28 percent), making decisions with spouse/partner (25 percent) and educating themselves (22 percent). Millennials had more trouble defining their style and making decisions with their spouse or partner (43 percent and 34 percent, respectively) than other age groups
- Homeowners who plan to hire a professional service provider over the next two years are most likely to hire a general contractor (52 percent) and a carpet/flooring professional (34 percent)
- In addition to paint (45 percent), respondents are most likely to purchase accessories (36 percent), lighting (35 percent), and interior furniture (31 percent) in the next six months
The annual Houzz & Home survey is the largest survey of residential remodeling, building and decorating activity conducted. It covers historical and planned projects, the motivations behind these projects, and the impact of the economy on home remodeling, building and decorating plans among the more than 20 million monthly unique users that use Houzz. The study yielded detailed data at the national, regional and metropolitan area level, which Houzz used to examine regional differences in priorities and spending.
Courtesy of Houzz.com