Tighter real estate market changes how and why people remodel their homes, Houzz survey finds

Facing a low number of residential properties for sale and higher mortgage interest rates, more people who already have a home are remodeling rather than moving to upgrade their lifestyle, according to the 2023 U.S. Houzz & Home Study.

A majority of U.S. homeowners surveyed by the online home renovation and decorating resource Houzz plan to live in their newly improved dwelling for a decade or more. Only 6% said they were readying their property to sell, compared to 12% in 2018.

Improvements range from installing smart lighting controlled from a mobile device to kitchen and bathroom remodels and room additions as well as enhancing outdoor areas. Of those surveyed, 58% said they renovated in 2022, which is the largest share in five years, according to the 12th annual Houzz study.

People who put remodeling projects on hold due to pandemic labor shortages, rising costs and uncertainty over production and delivery delays told Houzz they were motivated to remodel in 2022 because they felt they finally had the time and financial means.

The survey found people who waited still had to deal with challenges such as finding the right service providers and products, but issues have eased and rebates for installing energy-saving appliances, double-pane windows and wall insulation lessen upfront costs and lower monthly utility bills.

Owners of homes that were built 20 to 39 years ago saw the need to modernize and make repairs, and others who secured a low mortgage interest rate during a highly competitive market bought with the intention of making improvements.

Baby boomers (55-74) invested in aging-in-place features, while Gen Xers (40-54) and Millennials (25-39) were slightly more likely to expand their living space, the survey found.

“We’re seeing homeowners update their current home to make the space more functional for the longterm,” Liza Hausman, vice president of Industry Marketing at Houzz, stated in a news release.

Every square inch in a home matters, said Barbara Miller, design director for the Oregon remodeling and home improvement company Neil Kelly. She added that people want a dwelling adaptable to current and future needs.

Also in 2022, 57% of those surveyed said they decorated and 48% said they made repairs. The most common decor purchases were small-size furniture, storage and organization, and artwork.

“People by nature crave order and interior spaces that give them a sense of order and symmetry are good for people’s wellbeing,” said Portland designer Midori Karasawa of Style Guide Interior Design.

Kitchens and bathrooms

Kitchen and bathroom remodels continue to be the most desired and expensive home improvement projects. The national median costs for a kitchen upgrade was $20,000 and $13,500 for a primary bathroom in 2022, according to Houzz.

Median is the midpoint level, meaning half of renovating homeowners spent more and half spent less.

The median amount spent on major bathroom remodels — in which at least the vanities, countertops and toilets were replaced — increased by $5,000 in 2022, regardless of the size of the primary bathroom.

Experts offer these tips for kitchen improvements that pay off in the long run:

Energy-efficiency upgrades

Behind-the-walls improvements were also installed, mostly on older homes. Nearly 30% of homeowners surveyed by Houzz upgraded plumbing in 2022, closely followed by electrical and home automation.

Among typical home system upgrades, cooling and heating commanded the highest median spend in 2022 at $5,500 and $5,000, respectively, and are undertaken by more than one in five renovating homeowners, said Houzz.

Replacing an oversized, inefficient oil-fired boiler and furnace in an older home can also free up the basement to be finished as additional living space, increasing the property’s market value and widening its appeal, said broker Bobby Curtis of Living Room Realty.

Upgrades to windows and new paint were the most popular exterior projects along with landscaping, said Houzz.

Renovation activity continues into 2023, with more than half of homeowners planning projects this year, at an anticipated median spend of $15,000 and $85,000 for higher-budget projects, said Houzz.

Interior designer Garrison Hullinger has seen trends come and go since he founded Garrison Hullinger Interiors 12 years ago. His advice: Remodeled spaces should look great and function for decades.

Paying for improvements

Most homeowners surveyed by Houzz said they paid for improvements, big and small, with cash from savings and secured home loans. Using credit cards to fund projects in 2022 was less than previous years, according to the 12th annual U.S. Houzz & Home Study, which had more than 46,000 U.S. respondents.

The share of homeowners who had issues staying on budget increased by 4 percentage points since 2020 (27% in 2022, compared with 23% in 2020).

Many home remodeling and design professionals expect slowed growth in 2023, following strong years in 2021 and 2022, according to the 2023 Houzz U.S. State of the Industry.

Houzz.com has ideas, photos and information from more than three million home remodeling and design professionals including architects, interior designers, general contractors and design-build firms.

This article is written by Janet Eastman from The Oregonian and was legally licensed via the Tribune Content Agency through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].