DENVER—According to an authoritative new report from HomeAdvisor about the state of the home improvement industry—which included input from 5,000 U.S. households—bathroom remodels were the top project undertaken during 2020, a year dominated by the effects of a global pandemic. Rounding out the top three project types sought by homeowners was interior painting and installing new flooring, the report found.
HomeAdvisor, an ANGI Homeservices operating company, released its 2020 State of Home Spending Report: The Year of the Home, which focuses on home spending and how COVID impacted home improvement, maintenance and repair projects this year. As Americans spend significantly more time in their homes, they are rethinking spaces and are making changes to accommodate their new lifestyles.
For home improvement pros, the report holds several important findings, said Mischa Fisher, chief economist for HomeAdvisor.
“For replacement contractors in the windows/roofing/siding space the key findings are, first, despite all the demand, the primary reason for jobs not being completed was COVID-19,” Fisher explained. “In fact it was the primary reason for 30 percent of all jobs that weren’t completed. So there’s pent-up demand once the pandemic is over.
“The second big takeaway is the primary reason for remodeling spending this year. People were more concerned about homes suiting their lifestyle needs rather than they were about simply replacing something damaged, or getting a high return on investment. Those latter two reasons are still important to consumers, but this year lifestyle is also extremely important.”
Rising Costs, Millennials are Key
“This year’s topline growth in spending and projects is a story of increasing costs of supplies, increasing cost of labor and homeowners shifting spending from things like entertainment and travel to their homes,” continued Fisher. “While the cost to do projects compared to last year did increase, we also found that homeowners were spending more as well. The acceleration of home buying this year and underlying drivers of consumer spending like shifting demographics, baby boomers renovating to age-in-place, millennials changing needs to raise their growing families, a greater cultural focus on home design and home entertainment, an aging housing stock and a shortage of new home construction – among many other fundamental factors – were already resulting in more spending on home improvement, home maintenance, and home emergency repair and also continued this year.”
Homes have always been important, but the once in a century global pandemic has fundamentally shifted the relationship we have with our homes. Those factors, combined with a shifting range of needs for households as a result of coping with COVID-19, such as 27 percent more outdoor living needs, 40 percent more home entertaining, 50 percent more working from home, and 68 percent more home cooking, resulted in a shift in spending patterns, with 33 percent shifting commuting budget, 48 percent shifting vacation budget, and 52 percent shifting restaurant budgets into home services.
- The top reason for home improvement spending was to make the home better suit lifestyle needs, 41 percent of all consumers surveyed. This stands in contrast to 2019, where the number one reason was to replace or repair a damage, defect or decay, suggesting that COVID-19 is impacting people’s lifestyles.
- Despite strong spending trends, 30 percent of projects were not started or completed as result of COVID-19.
- 85 percent of Americans are spending more time at home as a result of COVID-19, with 67 percent spending significantly more time at home, resulting in 63 percent noticing more areas in need of improvement around their homes.
- 68 percent of people are doing more home cooking as a result of COVID; 52 percent have shifted some of their restaurant spending into home improvement projects; and a kitchen remodel is the most desired home improvement project, with 27 percent of people saying they would remodel their kitchens if given $10,000 for home upgrades.
- 71 percent of people want to see COVID-related business updates from home professionals, and 73 percent say that knowing a home service professional shares COVID-related information and actively promotes safety measures will influence their hiring decisions.
- The number one reason for projects to go over time or over budget was products or materials taking longer than expected to arrive, with 24 percent of respondents listing this as the primary reason for delayed or over-budget projects.
This report also found many generational trends, fueled by the onset of the COVID pandemic, including a focus on home services by millennials.
“Millennials are spending the most on home improvement projects this year,” said Fisher. “On average, millennial households spend or plan on spending nearly $10,000 on home improvement projects this year. Homeownership rates for millennials have jumped significantly, especially as COVID-19 has reemphasized the importance of the home and many companies move to flexible work location options. Millennials are not only rapidly becoming homeowners, but they are also spending more on home improvement than any other generation when they do.”
The report is informed by HomeAdvisor’s True Cost Guide, an online guide for homeowners to access real costs as reported by consumers for home projects, as well as results from an annual survey* conducted among homeowners.
Data included in the State of Home Spending Report is based on an online survey conducted by HomeAdvisor’s internal research team. Five thousand Americans were surveyed and represented the entire U.S. population: homeowners with mortgages, homeowners with mortgages paid off, renters, people living rent-free, those who conducted home improvement projects, those who did not, those who had maintenance and emergency expenditures, and those who did not.
All survey respondents reported having decision making responsibility related to home improvement, home maintenance and/or home emergency spending completed in the prior 12 months. The material and information contained in this report is for general information purposes only. You should not rely upon such information as a basis for making any business, legal or any other decisions. QR