Renovation spend has surged in the last three years, as median spend* increased 60 percent from $15,000 in 2020 to $24,000 in 2023, according to Houzz. The 2024 U.S. Houzz & Home Study of more than 30,000 U.S. respondents found that the top 90th percentile of spend also rose 77 percent to $150,000, from $85,000 in 2020. Plus, more than half of renovating homeowners (51 percent) spent $25,000 or more on renovations in 2023, up from 37 percent in 2020. While renovation activity remains strong with 56 percent of homeowners having taken on a renovation project in 2023, this is down 2 percentage points from last year.
Gen Xers** spent the most on renovation projects for the second consecutive year, with their median spend at $25,000, compared with Baby Boomers at $24,000. The top 10 percent of spenders in these groups allocated substantial budgets, with Gen Xers at $180,000 and Baby Boomers at $131,000. While Gen X leads in spend, Baby Boomers continue to drive renovation activity (56 percent). Gen Xers follow at 32 percent, up 5 percentage points from last year. While activity among renovating Millennials is far below Gen Xers’ (9 percent), their median spend is just $5,000 less ($20,000).
“Despite prevailing economic headwinds, such as high interest rates and persistent inflation, investment in home renovations continued in 2023. The increase in spend and shift to larger-budget projects is likely driven by rising product and labor costs. Generation X stands out in particular, leading in renovation expenditures for the second consecutive year,” said Marine Sargsyan, Houzz staff economist. “Looking ahead, with over half of homeowners planning renovations, it’s evident that the need to update limited and aging housing stock continues to fuel strong demand for home improvements.”
Along with this substantial investment, nearly all renovating homeowners enlisted the help of a home professional in 2023 (91 percent), with specialty service providers such as electricians, plumbers and painters, hired most frequently (47 percent). Homeowners are also taking the time to both plan and save for their projects. Renovation planning is typically double the time the actual construction takes. Plus, “finally having the financial means” is the project catalyst for more than a third of renovating homeowners.
Considering that motivation, it’s no surprise that cash from savings continues to be the most common form of funding for renovation projects (83 percent). Credit card usage followed at a distance (37 percent), but jumped 9 percentage points in 2023 (28 percent in 2022). For larger projects with spend between $50,000 and $200,000, for which homeowners gravitate toward diversified funding sources, secured home loans and cash from home sales (23 percent and 21 percent, respectively) were nearly as commonly used as credit cards (32 percent).
* Median spend is the midpoint level, meaning half of renovating homeowners on Houzz spent more and half spent less.
** Generational categories follow Pew Research Center’s age ranges: Gen Zers (18-26), Millennials (27-42), Gen Xers (43-58), Baby Boomers (59-77) and Seniors (78+).