With inflation at a 41-year-high in May and interest and mortgage rates rising, buying a home is getting more expensive for many Americans. And now, renovating one is also proving costlier, especially for new homebuyers, a new survey finds.
See: 20 Home Renovations That Will Hurt Your Home’s Value
Find: 5 Summer Home Renovations To DIY Before It Gets Too Hot
The 2022 Houzz & Home Survey of 70,000 US respondents, found that homeowners plan to spend $15,000 this year to renovate their houses. That’s a four-year high and a 50% jump over the $10,000 Americans spent over the previous three years.
The survey shows that in 2022, 55% of homeowners are planning to renovate their house, while 46% plan to decorate it. In addition, homeowners with higher-budget renovations are planning to spend $75,000 on projects in 2022 compared with $60,000 in 2021, the survey notes.
“Market fundamentals, including limited and aging housing stock, continue to propel the home renovation market,” Marine Sargsyan, Houzz staff economist, said in the survey’s press release. “Homeowners are clearly committed to investing in their homes despite heightened product and material costs driven by supply chain disruptions, and are exploring diverse funding sources. This is especially pronounced among recent homebuyers, who rely heavily on cash from previous home sales to fund their projects and spend significantly more than the national median.”
In terms of home improvements Americans are splurging on most today, kitchens still come first, according to Realtor.com. In fact, homeowners are spending 25% more in this space than in 2021.
“Kitchens have the best return on investment,” Khari Washington, a real estate broker at 1st United Realty & Mortgage, told Realtor.com.
Smaller spaces are also seeing an increase in spending, including include guest baths (38%), laundry rooms (33%), and guest bedrooms (28%), according to Realtor.com.
On the other hand, only 18% of new homeowners are investing in home office renovation.
Realtor.com also notes that open floor plans continue to reign supreme, as 29% say they’re knocking down walls.
“People do like open space, but with housing prices climbing, buyers may have settled for homes with layouts they didn’t like,” Washington told Realtor.com. “And current homeowners have decided to stay in their existing houses and make them over into the format they want.”
Finally, Americans are splurging on home security systems, as there has been an increase since 2015 in outdoor security systems, Realtor.com notes.
Tony Mariotti, a real estate agent and founder of RubyHome, told Realtor.com that the drop in prices of internet-enabled cameras and sensors means installing them is more affordable and attractive to cash-strapped homeowners today.
See: Why You Should Invest In a Home Security System
Find: 9 Ways To Save on Kitchen Renovations
He added, however, that “I don’t personally believe they are much of a deterrent for thieves. Since once you’ve recorded a masked person taking your Amazon packages from your porch, then what?”
More From GOBankingRates