11/24/2020

Home Owners Shift Expenses from Entertainment to Home Improvement

via NAHB Now

HomeAdvisor’s latest “State of Home Spending” survey revealed that home owners spent an average of $13,138 on home-improvement projects in 2020, compared to $9,081 in 2019. Rising costs for material and labor are contributing factors, but with 85% of Americans spending more time at home as a result of COVID-19, home owners are also spending more on the whole by shifting expenses from travel and entertainment toward projects that enhance their homes.

Increased home buying is also a factor, primarily driven by millennials, the oldest of whom are now at or close to the median age of first-time home buyers.

“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,” said Mischa Fisher, chief economist at HomeAdvisor, in a press release. “Millennials are not only rapidly becoming home owners, but they are also spending more on home improvement than any other generation when they do.”

Home maintenance projects, such as cleaning and landscaping, saw the biggest year-over-year increase, rising from $1,105 in 2019 to $3,192 in 2020. Contributing factors include people using their homes more, resulting in more wear and tear, and spending more time at home, making problems more noticeable. Home improvement and home emergency spending rose $745 and $124, respectively, over 2019.

Top projects included:

• Interior painting projects
• Bathroom remodels
• New flooring installations

Respondents to HomeAdvisor’s survey indicated that interior painting projects would remain the top project leading into 2021 — a departure from prior years, in which room remodels generally held the top spot. According to the report, “painting was one of the most popular projects across nearly all age groups because it is relatively affordable and offers a lot of visual value in terms of the look and feel of a room.”

The report also examined the way that homeowners are using their homes in the wake of COVID-19, which could have an impact on projects moving forward. Seven in 10 respondents indicated that COVID-19 had increased their need for home cooking, 50% were working from home and 40% were incorporating more home entertaining.

To view the complete report, visit HomeAdvisor’s State of Home spending page.