The rising trend of home renovations and other home services began in 2020 when the COVID-19 pandemic struck and continued into 2021. The pandemic shifted people’s lifestyles to revolve mainly around the home. Most people now work from home. To avoid the new variants of Covid 19, they are also spending their leisure time at home instead of venturing out to restaurants and bars or traveling. Therefore, homeowners are willing to spend on necessary repairs and maintenance and improvements to meet their new home-based needs. The Overview of US Renovation in Houzz’ 2020–2021 report and the 2021 Economic of Everything Home report by Angi Research provide a broader perspective and a deep dive into what is happening in this field.
American Home Services Spending Can Fund a Small Country
The total market for home services increased by $89 billion from 2020 to 2021 to reach $595 billion. Homeowners who did renovations rose from 53 percent in 2020 to 56 percent in 2021. This figure is a considerable amount that is more than the worth of the respective economies of Belgium and Thailand.
Home services cover renovations or remodeling, maintenance, and repairs. From 2020 to 2021, there were 148.5 million home improvement projects, 79.5 million emergency home repair projects, and 500 million home maintenance projects done per year. The amount of money individual homeowners spent for renovations in 2020 ranged from $1,000 to more than $100,000, showing that homeowners across various economic strata were involved in such activities. The largest share of homeowners, or 28 percent, spent $10,000 to $24,999. This was followed by 19 percent who spent from $1,000 to $4,999; 17 percent who spent from $25,000 to $49,999; 16 percent who spent from $5,000 to $9,999; 11 percent who spent from $50,000 to $99,999; and 9 percent who spent more than $100,000.
Conditions Were Right
Among the homeowners who did renovations in 2020, the available time during the pandemic was the final trigger for 44 percent of them, while the availability of funds was the trigger for 36 percent. They finally laid down floor protection materials for construction work to begin. Meanwhile, some had a newly purchased house that they wanted to customize based on their current needs and preferences.
Homeowners’ savings funded most or 83 percent of home renovations in 2020. Budgets previously allocated for traveling and socialization were instead refunneled toward home improvement. Credit cards and secured home loans were other sources of funding. The high cost of residential real estate has increased homeowners’ equity, enabling them to refinance for lower monthly amortization or get a home equity loan. A few used their tax refunds.
Types of Renovations
In 2020, the average home renovation involved three interior areas at the same time. The top five areas for renovation, in descending order, were the kitchen, an extra bathroom, the master bathroom, the living room, and an extra bedroom. Tying for the sixth place are the master bedroom, dining room, laundry room, and home office.
Homeowners also invested in upgrades in the following home systems, in descending order: plumbing, electricals, automation, security, cooling, heating, water heaters, insulation, entertainment, and ventilation. Intelligent systems, in particular, gained popularity in the time of the Internet of Things (IoT). Smart TVs and streaming media players showed the highest increases in acquisition. With cinemas closed, people watch movies at home through streaming services.
On home exteriors, the most popular renovations involved, in descending order, exterior painting, roofing, skylights, windows, doors, gutters, and sidings. In descending order, outdoors, popular structures or systems added to homes were plant beds, plant borders, lighting, lawns, fences, patios or terraces, decks, porches or balconies, irrigation, workshop sheds, driveways, gazebos, swimming pools, and outdoor kitchens.
These reflect the homeowners’ need to extend their living spaces to the outdoors during the pandemic. Because plants bring nature to their environment, providing a sense of calm, many homeowners developed their yards. Outdoor gathering places enable them to relax in the fresh air and bask in the sunshine. A pool provides not just enjoyment but also exercise. These are all beneficial for both physical and mental health.
Renovation Issues Faced by Homeowners
The top issue reported by homeowners who did renovations in 2020 was finding service providers they align with. This was followed by finding products since there was a shortage in building materials and appliances during the pandemic. Prices of materials and appliances are also skyrocketing; hence, homeowners found it difficult to stay on budget. They had to deal with many unexpected developments and found it challenging to keep on schedule.
The increased spending on home services covering repairs, maintenance, and improvement is money well-spent. The home is both an office and a recreational hub these days. All these must be seamlessly integrated to make the home truly a haven.