The surge in home renovation that started in 2020 continues across the United States in 2021, according to Business Insider. It cites data from the Joint Center for Housing Studies (JCHS) of Harvard University showing that homeowners spent $420 billion in home improvement and repair in 2020. The researchers expect spending to increase by four percent in 2021.
What Spurs Renovations
The housing boom with soaring residential real estate prices has a lot to do with this. The older generation who already have significant equity in their homes can use that equity for renovations. Instead of selling their current home and buying a better one, they opt to stay and make the most of what they have. It is understandable that with the current shortage of available houses for sale, they might fear not being able to purchase one.
On the other hand, the millennials who are at the stage of building a family and buying a home are finding themselves priced out of prime housing. Many of them can only afford fixer-uppers. If the repair is crucial for the house to be livable, they have no choice but to do repairs and renovations.
Other new homeowners are also more likely to do renovations upon moving in so that they can tailor the house to their specific needs. For instance, they may want a different color scheme in various rooms, or they want to get rid of the old carpet.
Most Popular Renovations in 2020 and Why
The True Cost Report of HomeAdvisor, covering data from January 1 to December 31, 2020, listed the ten most popular renovations in 2020 and their respective average cost nationwide. These include, in descending order, interior painting at $2,007; bathroom remodeling at $13,401; installing new flooring at $4,680; landscaping at $2,389; kitchen remodeling at $35,317; exterior painting at $3,291; installing smart home devices at $205; installing new roofing at $9,375; putting up new fencing at $2,991; and building a deck or porch at $3,291.
The study notes that among the ten projects, interior painting ranked second to the last in cost while having a huge visual impact. Installing a new floor, landscaping, and exterior painting are also relatively low in cost and similarly make a huge difference in the look of the house. This accounts for their ranking in first, third, fourth, and sixth place in popularity.
The second and fifth most popular projects, bathroom remodeling and kitchen remodeling, are the top two most expensive. The study calls these “lifestyle-value” projects. People who can afford these are willing to spend top money to get what they want. Those who bought fixer-uppers with problems in the bathroom and kitchen have no choice but to spend on these projects.
Roofing is something that people usually change only when necessary. It is also crucial in weatherproofing the house, keeping the temperature inside controlled in summer and winter. This reduces the use of heating and air conditioning equipment, reducing the power bill. Installing smart home devices also contribute to energy savings.
Building a deck or porch is popular during the pandemic as people yearn to spend time outdoors. It gives a respite from cabin fever, especially among those who are not yet fully vaccinated. A new fence can provide privacy as the family spends time outside the house.
Renovations With the Highest ROI
The 2021 Cost vs. Value Report of Zonda Media lists the renovation projects that give high returns on investment (ROI) if the house is resold. The top two that give more than 90 percent ROI are garage door replacement and the installation of manufactured stone veneer. A minor kitchen remodel with midrange materials gives more than 70 percent ROI.
ROI ranging from 69.4 percent to 60.1 percent can be gained from fiber cement siding, vinyl windows, vinyl siding, wood windows, a wooden deck, a steel entry door, a composite deck, a fiberglass entrance, asphalt shingles roofing, and a midrange bathroom remodel.
ROI from 57.9 percent to 52.8 percent can be gained from a universal design bathroom remodel, metal roofing, an upscale bathroom remodel, a master suite addition with midrange materials, and a bathroom addition with upscale materials.
Choosing Your Home Renovation Project
Apart from considering your preferences, cost, and ROI, another factor must be part of planning a renovation. In May, the National Association of Home Builders (NAHB) reported serious shortages in appliances, oriented strand board (OSB), plywood, framing lumber, windows and doors, trusses, copper wiring, and vinyl sidings.
There were also shortages in plumbing fixtures and fittings, structural insulated panels, millwork, gypsum wall board, HVAC equipment, roofing materials, lightweight framing steel, hardwood flooring, insulation material, and clay brick. As of June, there were still reports of a widespread shortage of construction materials.
When planning a project that involves any of these materials in shortage, it is best to research a supplier first and ensure availability. You will be fortunate to be able to secure an order in coordination with your contractor.
