Homeowners who have long hated their grungy floors, salivated over their neighbors’ fancy outdoor patios, and wanted to give their sagging homes a general face-lift since they moved in are opening their checkbooks wide.
Americans more than doubled what they spent on home improvements in the past year, dropping about $5,157 on average, according to a recent survey from home services marketplace HomeAdvisor. That’s up almost 57% from February 2016 to February 2017.
HomeAdvisor surveyed 500 homeowners aged 25 and up who had completed home maintenance or improvement projects within the past 12 months.
Homeowners are “feeling wealthier than before because of the improvement in their homeowner equity” as the economy and the real estate market have improved, says HomeAdvisor Chief Economist Brad Hunter. “People have more access to home equity loans and lines of credit.”
The biggest generations are the biggest spenders
So who’s likely to drop the most money on these renovations? Millennials and baby boomers. Members of Generation X, who were the most badly burned by the last housing bust, spent the least.
Many younger buyers were compelled to have work done because they tend to buy older (and cheaper) properties that need more repairs. Typically, they’re taking care of the most pressing projects first—like that leaky old roof. Then, over time, they’ll get around to putting in a new backsplash. And they often try to save a few bucks by doing whatever they can themselves.
Millennials spent an average of $5,046 on home improvements, compared with the $4,771 that Gen Xers plunked down. Baby boomers, who are more likely to have the cash to add a fourth bathroom or to open up the floor plan, spent the most—an average $5,604.
Boomers aren’t getting any younger—and they know it. So in addition to remodeling their kitchens and bathrooms, they’ve begun thinking about aging in place.
“I have boomer clients who are fixing up their homes for themselves, because they see their parents [struggling] in their own homes. So they think, ‘Wow, I think I’d better get my house ready in advance,'” says Dan Bawden, remodelers chairman at the National Association of Home Builders. “They say, ‘I love my home, I love my neighborhood. I’m going to stay here till they carry me out feet first.'”
Bawden’s company, Legal Eagle Contractors, in Bellaire, TX, helps them prepare by removing tubs and replacing them with wheelchair-accessible showers outfitted with grab bars. The company also removes stairs by the entrances, adds ramps, and swaps difficult-to-turn doorknobs with levers that can be pushed with an elbow.
New and established homeowners are most likely to splurge on remodeling
It’s not just age that determines who spends the most on remodeling. Brand-new homeowners and those who have been in their homes for more than a decade are most likely to invest in home improvements, according to the survey.
“When somebody buys a new place they want to personalize it,” says Hunter. “They paint, they refinish, they refurbish, and then they also may say, ‘I want to update the appliances.'”
Meanwhile, the established homeowners are more likely to have pricey but important maintenance projects and repairs.
Those living in the West and Northeast spent the most on home improvements, at an average $6,005 and $5,381, respectively. That’s often because their homes cost more, so they have more equity that they can tap to fund that fancy new deck or those sleek kitchen appliances.
Plus, home maintenance and remodeling work often costs more in pricier areas because labor and materials are also more expensive.
Higher mortgage rates are actually good for the remodeling market
Rising mortgage rates and the dearth of abodes on the market could spur even more homeowners to remodel, according to the survey. That’s because it might cost current homeowners more to trade up to a new home than to upgrade their current residence.
“They really like their neighborhood, like their neighbors,” says longtime remodeler Bill Brackmann, president of Brackmann Construction in Belton, MO. In some cases, “it was more efficient to make the home they’re living in the home they want to be in.”
Despite demand, remodeling could slow down
While homeowners may be demanding an open floor plan, sunroom, or new hardwood floors (with those must-have distressed wide planks for a rustic look), it might become more difficult to find a remodeler going forward.
The shortage of skilled laborers is a very real problem. Just as there aren’t enough construction workers putting up new homes, there aren’t enough entering the remodeling field. And that makes it tough for remodelers to take on more jobs.
“We worry about not having enough skilled labor,” says remodeler Bawden.
