There are certainties in life, such as death, taxes, and, if you’re a homeowner and home repairs and improvements projects. These projects will come to you, even if you haven’t planned for them.
According to the U.S. Census Bureau’s American Housing Survey, homeowners spent $522 billion to improve their homes between 2017 and 2019. This is an increase of approximately 115 million projects. This is $72 billion more than the previous two years.
Since then, millions more homeowners have undertaken home improvement projects than usual, likely because the world was trying to slow the spread in 2020 of the coronavirus. According to NerdWallet, 61% of U.S. homeowners have taken on home improvements since March 1st, according to an online survey by Harris Poll.
Holden Lewis, NerdWallet’s mortgage and home expert and NerdWallet’s pandemic expert, says that the pandemic likely triggered a lot of rehab and repair projects. First, homeowners were present to oversee the work or take it on their own. People seized the opportunity to improve their homes before listing them. This led to skyrocketing home prices in the late summer span>
We analysed the American Housing Survey results and NerdWallet surveys that were conducted online by The Harris Poll. These surveys included more than 1,400 homeowners. This perspective gives us a better understanding of homeowners’ current, current, and future approaches to managing projects around their house.
According to census data, homeowners in America spent $522 billion to improve their homes between 2017 and 2019, an increase of $72 million compared to the previous two years. The average project spending also increased from $1,350 up to $1,500.
According to NerdWallet’s August survey, 3 out 5 homeowners have started home improvements since March 1st. We asked homeowners in September if they would allow professionals to enter their homes. This was due to safety concerns regarding the coronavirus.
Many homeowners have the financial resources to make home improvements.
NerdWallet analysis of census data shows that 37% of homeowners do their own projects. This is almost the same as the 38 percent of DIY projects reported two years ago in the 2018 Home Improvement Report. These DIY projects are cheaper, probably because homeowners can save on labor costs and because homeowners are more likely DIY lower-cost projects.
Home Improvements amid a global pandemic
In 2020, more people are spending time at home which means that there is more time to make home improvements. According to the August NerdWallet survey, 61 percent of homeowners have completed home improvements since March 1, 2020. These homeowners spent an average of $6,438, for these projects.
About a third (34%) of homeowners who have undertaken home improvements in the last two years claim they did so because they were more comfortable at home with pandemic-related social distancing, according to the September NerWallet survey.
Homeowners are now more comfortable allowing contractors to enter their homes due to the pandemic. According to the September survey, more than half (53%) of respondents said they would not allow home-improvement professionals into their homes due to safety concerns regarding the coronavirus. More than three quarters (79%) of respondents said that if a professional from home improvement had to enter their house, they would be more cautious than usual because of safety concerns about coronavirus.
Handy tip for homeowners: Make sure you communicate any safety concerns to contractors before they visit your home. As you would expect them to dress in masks and clean up after a project, so should their expectations.
It is possible for home repair and renovation projects to end up costlier than originally anticipated. For example, if you discover a plumbing leak or shingles that were not properly repaired, it can lead to rotten subfloors. According to NerdWallet’s September survey, 82% of homeowners said they usually stick to their budget for home repair and improvement projects, as opposed to 76% in 2018.
To stick to a budget for home improvements, you must accurately estimate the cost of the project and add a 10%-20% buffer in case of unexpected costs. The American Housing Survey provides a home improvement project estimator that shows the median cost of a range of projects. The homeowner must then decide how they will pay for the project.
Three-fourths (75%) of homeowners say they have money set aside for home repairs/improvements, according to the September survey, compared with 69% when we asked in 2018. According to the September survey, 52% of homeowners who completed projects in the last two years said they were able “easily” to pay for most of them without having to tap into savings or make sacrifices. This leaves just half of those who weren’t.
There are many financing options. The American Housing Survey found that cash from savings is the most common source of financing. However, more costly projects can be paid for using cash-out refinancing or home equity loans, contractor arranged financing, and credit cards. The survey response for 6% of projects was “Something else”, which likely refers to personal loans or borrowing money from family and friends, as well as government grants for home improvements.
A handy homeowner tip: When you need to finance your home improvement project, make sure you explore all options. There are many factors that will influence your decision, including the cost of your project, the time it will take to complete it, your home equity, and your financial situation. You can use a home improvement financing calculator to help you compare the costs of personal loans, home equity loans, lines of credit, refinancing your mortgage and credit cards.
Doing It Yourself
According to NerdWallet analysis, 37% of home improvements are done by homeowners and 63% are hired professionals. You have many reasons to do your own home improvements and repairs. The coronavirus pandemic was just one example. Cost is another. DIY projects account for less than one-third (or 17%) of all home improvement projects. This indicates that they are more affordable.
According to NerdWallet’s September survey, more than one in five homeowners (22%) who have completed DIY projects in the past two years did so because they couldn’t afford to hire someone.
According to census data, the average project cost is now about $1,500. However, the average DIY project cost costs $600. It’s true that DIY can save money but homeowners are more likely than others to do the work themselves.
Lewis said that staying-at-home orders allowed people to spend more time watching HGTV and YouTube. This made home renovations and repairs seem possible. This might have encouraged homeowners to take on projects they would normally leave to professionals.
Handy homeowner tip: Start with small projects like painting, landscaping, and changing out light fixtures if you are new to home improvements and repairs. These projects are easy to complete and simple to fix. It can be costly to hire a professional to fix a DIY problem that has gone wrong. This is far more expensive than the money you could save by hiring one in the first instance.
Home Improvements in Years to Come
The majority of homeowners know that there will be some type of project or repair in the future. However, 7% of homeowners believe they will spend zero money on home improvements and repairs in the next two-years, according to the NerdWallet September survey. Homeowners expect to spend an average of $6,251 for home improvements and repairs in the next two-years, with one in five (20%) anticipating spending $10,000 or more.
Asking homeowners how they will pay for these projects, they indicated that cash is their preferred method of payment. This includes cash they have at hand (34%), cash they intend to save specifically for these projects (40%), and other savings (21%). One in ten (11%) homeowners said they would use the money they have saved from the economic stimulus check. However, it isn’t clear if this refers to money that was issued earlier this summer or whether they are hoping to receive additional funds from the second stimulus check when they take on these projects.
25% of people will use credit cards. This is a good thing if they intend to earn credit card rewards and pay off their balance before interest.
Handy homeowner tip: Plan and save more money for your home improvements. Not all projects can be predicted. For example, plumbing leaks and a malfunctioning HVAC system could occur without notice. You can protect your home from some unexpected repairs by padding your household emergency fund. If you feel that saving three to six monthly living expenses is too ambitious, start with $500 and work your way up.
54% of homeowners who are considering home improvement projects over the next two-years said that they want to make it more comfortable.
Lewis states, “One thing that we can take from 2020 is that home is our refuge.” Comfort in the place we spend the most time span> is sometimes the best return on investment.
The Harris Poll conducted these surveys online in the United States for NerdWallet between Aug. 18-20 2020 among 1,414 homeowners, and Sept. 8-10 2020 among 1,413 homeowners. Online surveys do not use a probability sample so it is impossible to estimate the theoretical sampling error. Anna Palagi, [email protected] can provide more information about the survey methodology including weighting variables, subgroup sample sizes and other details.
Every two years, the American Housing Survey is published. Interviews were conducted between June and November 2019, and homeowners were asked about their home improvements in the last two years.
The AHS requires homeowners to report what they spend on various projects. The survey doesn’t break down projects by size, scope, materials, or finish.
This report only applies to owner-occupied homes.
The AHS measures project expenses. The AHS measures project expenditures.