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.
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