Homeowners are increasingly living out their HGTV fantasies by remodeling their homes, with a particular focus on taking their kitchens and bathrooms from drab to fab.
Homeowners spent the most on renovating their kitchens, at a median $14,000 in 2018, according to a recent survey from Houzz, a design and remodeling website. That spend surged 27% from 2017; the previous year, it had risen 10%.
More than 140,000 people participated in the annual survey that looked at 2018 remodeling spending and trends.
Folks also poured money into their guest and master bathrooms. The median spend on those rooms jumped 17% and 14%, respectively.
“These are highly prized spaces in a home,” says Nino Sitchinava, the principal economist at Houzz. “Baby boomer and Generation Xers are the dominant share of renovating homeowners. … They’ve been saving some money to get that perfect kitchen and bathroom remodel done.”
Increased building regulations, more interest in high-end appliances and premium finishes, and tariffs on foreign goods used in these remodels are driving prices up, particularly in kitchens and bathrooms, says Sitchinava.
Overall, 51% of homeowners surveyed said they planned to continue or start renovations on their homes, according to the Houzz report. They expect to shell out a median $10,000 this year.
Home improvement spending growth is beginning to slow
Nationally, the amount of money folks have been spending on home improvements has begun to moderate. In half of the largest 50 markets, homeowners spent less (by 5% to 20%) fixing up their homes than they did in the previous year. They spent more in only six markets. And their priority in spending was the kitchen and bathrooms.
“The growth of the home improvement market has been phenomenal in the last five years,” says Sitchinava. It’s been hovering around 7% to 9% annually. “That’s just not a sustainable pace.”
In 2018, she said, they saw signs that the growth rate was starting to slow.
That’s in line with projections from the Joint Center for Housing Studies of Harvard University. Researchers there don’t expect homeowners to spend less in 2019, but growth will slow in 29 of the 49 largest metropolitan areas. (Metros include the main cities and surrounding suburbs and smaller urban areas.)
Conversely, the center expects folks will spend more in areas where home prices and homebuilding is rising.
“Metros with cooling home prices and sales activity are not able to sustain the same pace of investment in home improvements as in recent years,” Chris Herbert, managing director at the Joint Center, said in a statement. “Our projections show especially pronounced slowing in markets such as San Antonio, Kansas City, Pittsburgh, Buffalo, and Dallas.”
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Source: Housing Trends Feed