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2015 Another Strong Year for the Home Renovation Market06-28-16 | News

2015 Another Strong Year for the Home Renovation Market
Fifth Annual Houzz and Home Survey

A recent survey of homeowners found that the majority of them used personal savings/finances to fund their renovations last year (82%), followed by credit cards (21%). Millennials are most likely to pay for their renovations with a credit card (32%), and Baby Boomers are least likely (17%).

Landscaping of garden beds or borders was the most common outdoor project last year, tackled by 36 percent of homeowners who renovated in 2015 according to the fifth annual Houzz and Home survey of more than 120,000 respondents in the U.S.

Additional popular outdoor projects include: lawns (23%), lighting (16%), decks (15%), patios or terraces (14%), irrigations systems (13%), and fences (13%).

When it comes to the motivations behind renovations, finally having the time was the top trigger for home renovation projects in 2015 (38%), ahead of finally having the financial means (37%), the top trigger for 2014 projects. Homeowners are renovating instead of buying a "perfect" home largely due to their desire to stay in their current home or lot (49%) or remain in their current neighborhood (31%). Financial considerations such as renovation being a more affordable option or providing a better return on investment (28% each) trail behind.

Over a quarter of renovations are driven by recent home purchases (26%), and more than one in 10 renovators purchased a home in 2015 (12%). Renovators of a recently purchased home invest more in their projects than other homeowners ($66,600 versus $59,800).

People tend to buy a home with the intention of renovating versus seeking an already "perfect" home, with the goals of creating a personalized space (34%), capitalizing on the affordability of renovating versus buying a home (32%), or maximizing their return on investment (32%).

Those preparing to sell their home (13% of renovators) are also investing in renovations, focusing on exterior projects that enhance curb appeal. Homeowners preparing their home for sale spend just over half the amount that recent homebuyers invest in their projects ($36,300 versus $66,600), prioritizing immediate return on investment and rapid sale.

"2015 was another strong year for the home renovation market, with homeowners continuing to increase investment in their homes," said Nino Sitchinava, principal economist at Houzz. "While the majority of renovations are spurred by homeowners' desire to upgrade a home they have lived in for some time, recent home purchases are also an important driver of home renovation activity. Recent homebuyers tend to do more, spend more, and are more likely to hire professionals to help with their renovation projects than other homeowners. As the churn in the housing market picks up in the near future, the home renovation market should see meaningful growth."