According to a new report, Americans spent $624 billion on home improvement projects between 2019 and 2021, but a potential recession and inflation could affect this going forward.
There were around 135 million home improvement projects going on from 2019-21, according to the American Housing Survey, which the U.S. Census Bureau conducts. That represented approximately $100 billion in increased spending compared to the previous survey looking at the years between 2017 and 2019.
The two-year period the survey looked at started before the COVID-19 pandemic and went through the lockdown periods when many people were taking on ambitious projects around the house. That was also when homes, even when they needed significant work, were selling at a premium.
Mortgage experts believe the pandemic triggered a massive amount of home improvements. Homeowners were spending money to create new spaces needed during the pandemic, such as adding in-home classrooms and offices.
There were also considerable shifts in lifestyle, where people in small homes and apartments were looking for more space in the suburbs. All of these things that were pretty specific to the pandemic led to more renovations. Homeowners were either making their homes more suited to their needs and lifestyle or preparing them to sell.
NerdWallet conducted its own report, the NerdWallet Home Improvement Report, looking at the latest American Housing Survey data. NerdWallet looked at the results of the survey they conducted by The Harris Poll in September 2022, asking homeowners about their activities related to home improvements and their feelings.
Findings of that research included that the share of homeowners who said they’re easily able to pay for their improvement projects has declined since 2020. Most planned improvements currently aren’t targeted to homebuyers. Instead, the most commonly cited reasons homeowners say they’re doing projects include making them more comfortable and satisfied with their living space.
The NerdWallet surveys indicated that homeowners think about the economy in their planning. Homeowners expect to spend around $7,750 on home improvement plans over the next two years, and inflation and whether or not we go into recession will shape their decisions.
Almost all surveyed homeowners—95%-- said they were considering doing improvement projects in the next two years, according to the survey conducted by NerdWallet. Many respondents said they were planning small projects, like updating light fixtures, but around half said they were considering larger-scale projects, like adding a room or a complete renovation. Around 22% said they were hoping to renovate their kitchen, and the same percentage of respondents said they were considering renovating or adding a bathroom.
Millennial homeowners between the ages of 26 and 41 were most likely to say they would spend money on home renovations in the next two years compared to other age groups.
One analyst working on the NerdWallet survey said that many homeowners are likely to stay in their current home longer than they initially expected because they don’t want to pay higher mortgage rates. As a result, more owners will likely remain where they are but improve their current homes.
Finally, Angi also released its own 2022 State of Home Spending Report. According to that, U.S. homeowners who did projects last year spent an average of nearly $13,000. The most popular projects in the last year included regular maintenance, interior painting, and bathroom remodels.