A tight, expensive housing market has more homeowners staying put — upgrading and enlarging their current homes rather than fighting to afford a new one. The costs to remodel, however, are growing.
More than half (58 percent) of homeowners surveyed by Houzz, a home design and remodeling website, upgraded their homes last year at a median spending of $15,000. The amount homeowners spent has not changed in the past three years, but the cost of renovations has, thanks to a shortage of labor and rising prices for materials.
“The implications for the homeowners are pretty severe,” said Nino Sitchinava, principal economist at Houzz, who added that the project backlog in some parts of the country is upwards of three to four months. “And the majority of the remodelers on Houzz tell us that once a construction project starts, there is significant delay in the timeline for the completion. That combined with the rising costs of labor and more recently products and materials, [so] we are looking at rising prices for home renovation services.”
The bigger the project, the bigger the increase in how much people are willing to spend, especially on projects they believe will increase their home’s resale value. Homeowners remodeling their kitchens spent 10 percent more than in 2016, and for major kitchen remodels (more than 200 square feet), the spending increased from a $30,000 median renovation in 2016 to $33,000 in 2017.
As costs rise, more people are setting strict budgets for their projects. More than three-quarters of those surveyed had an initial budget before starting their renovation in 2017 compared with 69 percent in 2015. Still, 19 percent went over that budget last year, compared with 16 percent who overspent in 2015.
While kitchens and bathrooms continue to be the most popular upgrades, master bedroom/bathroom suites moved up to the number three spot, overtaking living/family room remodels. The median amount spent on a master bedroom remodel increased 33 percent ($2,000 in 2017 versus $1,500 in 2016). Spending on living/family rooms was unchanged at $3,000.
“It's kind of your own vacation in your own home when you go home from your busy day and you want to relax you can go into your spa like bathroom,” said Kerry Ann Rodriguez, director of project development with Case Architects & Remodelers in the Washington metropolitan area.