Homebuying Spurring Remodeling Activity

Home sales have been a hot top­ic through­out much of the year. Aside from the short drop due to COVID-19 lock­downs this spring, home pur­chas­ing has explod­ed, show­ing growth rates more than 20% in recent months com­pared to last year. While this explo­sive growth has larg­er impli­ca­tions over­all, like increas­ing home prices and home­own­er­ship rates and decreas­ing hous­ing inven­to­ry, it also has a longer tail for those with­in the home improve­ment and remod­el­ing indus­try. As shown in HIRI’s Con­sumer Project Plan­ning sur­vey and echoed by MetroSight’s Issi Romem at HIRI’s recent Vir­tu­al Sum­mit, the time peri­od fol­low­ing a home pur­chase is filled with a flur­ry of ren­o­va­tion activ­i­ty by the new homeowners.

Recent­ly, HIRI sur­veyed more than 800 home­own­ers that have pur­chased a home with­in the last year. We strove to under­stand the type of project activ­i­ty these recent home pur­chasers under­took with­in that first year, and what is their ide­al home. Addi­tion­al­ly, due to the tim­ing of this year’s sur­vey, it allowed us some insight into any impact that COVID may have had on the home buy­ing mar­ket.

A Steep Increase in Project Activ­i­ty

Home buy­ers engaged in home improve­ment activ­i­ties 83% of the time with­in the first year of own­ing their home. This is a sig­nif­i­cant increase from the last time HIRI con­duct­ed this sur­vey where the rate was at 70%. Most com­mon­ly the kitchen was the recip­i­ent of a makeover with more than one-third of recent pur­chasers improv­ing their culi­nary stronghold.

Com­mon areas, in gen­er­al, were the focus of much activ­i­ty with strong growth in such areas as land­scap­ing, decks, and liv­ing rooms while oth­er areas such as foy­ers and bath­rooms were flat or dropped com­pared to two years ago. While beau­ti­fy­ing or fresh­en­ing up the home is still the top rea­son for under­tak­ing projects, there was a sig­nif­i­cant increase in those who want­ed more space in their home to be more com­fort­able. As many were seclud­ed to their homes dur­ing the COVID lock­downs, hav­ing more space to accom­mo­date seems a pri­or­i­ty to many.

COVID Had an Impact on Hous­ing

The emer­gence of COVID in 2020 had long reach­ing effects through­out our soci­ety, and hous­ing was no dif­fer­ent. In a time with high job­less­ness and over­all safe­ty con­cerns, the mark on home pur­chas­ing has been rel­a­tive­ly pos­i­tive. Near­ly 20% of home pur­chasers from March through Sep­tem­ber stat­ed that COVID ulti­mate­ly encour­aged their home pur­chase. Inter­est rate drops are the pri­ma­ry fac­tor for much of the influ­ence, yet locale, both in terms of con­ges­tion and prox­im­i­ty to work played roles.

The gov­ern­ment stim­u­lus check that most Amer­i­cans received ear­li­er this year also aid­ed as 19% say the mon­ey they received helped with the down pay­ment on their new home. This could be a crit­i­cal piece of near future home­own­er­ship rates. Many younger Amer­i­cans, strapped with stu­dent load debt, may have tak­en a sig­nif­i­cant step for­ward in sav­ing for a home with the addi­tion­al income.

Even for those who did not need the stim­u­lus for their down pay­ment, it was use­ful for help­ing to fund their project activ­i­ty. Eight per­cent of project-doers uti­lized the gov­ern­ment stim­u­lus on their projects. In gen­er­al, more fund­ing sources were used across the board, includ­ing a sig­nif­i­cant rise in cred­it card usage for projects, which might be attrib­uted to the tem­po­rary fur­loughs many saw dur­ing the ear­ly months of the pandemic.

Where to Learn More

If you are a cur­rent HIRI mem­ber, you can head over to the survey’s release page for more infor­ma­tion on this cohort.

If you are not cur­rent­ly a HIRI mem­ber, there is no bet­ter time than now to join. HIRI is con­stant­ly track­ing and updat­ing research data in order to bring the best sources to our mem­bers. As a mem­ber of HIRI, this infor­ma­tion can help pro­vide insight for all aspects of busi­ness, from prod­uct teams and insight teams to man­age­ment and exec­u­tives.

Con­tact us today with any ques­tions on becom­ing a mem­ber. We also offer a use­ful month­ly newslet­ter with all the lat­est information.