Four Trends in Home Buying and Renovating From 2022

4 Trends in Home Buying and Renovations From 2022

Dec 06, 2022

A house is one of the most mean­ing­ful pur­chas­es a per­son will make in their life­time. Not only do home­own­ers want their hous­es to reflect the hard work that led up to the pur­chase, but they also often plan to increase the val­ue of their invest­ment by con­tin­u­ous­ly upgrad­ing fea­tures of their homes. Enter your home improve­ment brand.

It comes as no sur­prise that home­buy­ers and sell­ers make up a sig­nif­i­cant seg­ment of the home improve­ment mar­ket, but what projects are recent home­buy­ers jump­ing to under­take and why?

To bet­ter under­stand the moti­va­tions and desires of this con­sumer cat­e­go­ry, the Home Improve­ment Research Insti­tute designed a sur­vey to assess recent home­buy­ers’ behav­iors toward home improve­ment projects and how they change over time. The study also helps man­u­fac­tur­ers and retail­ers bet­ter iden­ti­fy the con­sumer out­look for mak­ing home improve­ments based on the type of recent home­buy­ers (e.g., first-time buy­ers, expe­ri­enced buy­ers, new home­buy­ers and exist­ing homebuyers).

Won­der­ing how to bet­ter posi­tion your home improve­ment brand among a par­tic­u­lar type of home buy­er? Here are some top take­aways cov­er­ing the rela­tion­ship between home­buy­ers and home improvement.

1. More than 90% of homebuyers participate in home improvement projects.

Accord­ing to HIRI’s Recent Home Buy­er Study, more than 9 in 10 respon­dents who pur­chased homes in the last year have since under­tak­en home improve­ment projects. For con­text, this fig­ure is up from 83% in 2020, up from 70% in 2018, and com­pa­ra­ble to 83% in 2016. 

Home­buy­ers that par­tic­i­pat­ed in home improve­ment projects with­in the first year spent a medi­an of $6,000 doing so, usu­al­ly to make their homes more beau­ti­ful, to match per­son­al pref­er­ences, and replac­ing old materials.

Top Areas Improved

  • Kitchen – 42%

  • Bath­room – 33%

  • Deck, patio, porch or fenc­ing – 31%

  • Land­scap­ing or cement work – 30%

  • Bed­room – 27%

2. Most home sellers made home improvements before listing.

It’s not just new home­own­ers who are imple­ment­ing home improve­ments. Ren­o­va­tions to exist­ing home fea­tures can help increase the val­ue of a home, which is why 75% of home­buy­ers who sold their pre­vi­ous home made improve­ments before putting it on the mar­ket. These home­own­ers spent a medi­an of $5,000 doing so, usu­al­ly to increase their home’s val­ue and help it sell faster.

What does this mean for home improve­ment prod­uct mar­keters? The home improve­ment life cycle may peak both imme­di­ate­ly after and imme­di­ate­ly before pur­chase, so it’s impor­tant to add val­ue and for your mes­sage to res­onate with con­sumers on both sides of the journey.

3. Homebuyers were more likely to buy fixer-uppers in 2022 than in years prior.

While rates were still low­er, hous­ing that was more afford­able than rent­ing and that offered the oppor­tu­ni­ty for long-term invest­ment were the top moti­va­tors for buy­ing a home in 2022, accord­ing to HIRI data. 

How­ev­er, prop­er­ty val­ues have increased dra­mat­i­cal­ly in the last six years. Per­haps because of that, recent home­buy­ers have been more like­ly to buy a home that required addi­tion­al work than they were in 2020. Home­buy­ers are account­ing for the real­i­ty that afford­able hous­ing stock will require repair and remod­el improvements.

Fur­ther, the actu­al ren­o­va­tion lev­el required as report­ed by sur­vey respon­dents has been com­pa­ra­ble to the amount of home improve­ment prod­ucts and ser­vices respon­dents intend­ed to purchase. 

We expect this trend to con­tin­ue in 2023 and 2024 based on the decreas­ing afford­abil­i­ty of the hous­ing mar­ket and the hes­i­tance of builders to increase new con­struc­tion output. 

Webinar: HIRI Monthly Tracker: 2022 in Review and 2023 Outlook, WATCH

4. First-time buyers are more willing to buy homes that need renovations.

Com­pared to their more expe­ri­enced coun­ter­parts, first-time buy­ers were sig­nif­i­cant­ly more will­ing to (and ulti­mate­ly did) buy homes that need­ed some work. First-time buy­ers also tend­ed to buy old­er, less expen­sive homes, which explains why some ren­o­va­tion work may have still been desired after move-in.

Look­ing to tap into the pow­er of gen­er­a­tional dif­fer­ences in your mar­ket­ing mes­sag­ing? Home improve­ment mar­keters can study the moti­va­tions behind the projects new home­own­ers may desire and sup­ply them with the right tools and prod­ucts to get the job done.

For exam­ple, mil­len­ni­als (who are gen­er­al­ly first-time buy­ers) cite affordability/​better invest­ment, a bet­ter loca­tion and need­ing more square footage as the top rea­sons for buy­ing. As such, home improve­ment projects may include increas­ing stor­age space in the home or equip­ping rooms with mul­ti­pur­pose functionality.

Regard­less of whether home improve­ment activ­i­ty hap­pens before a home sale or after (or some time in between), under­stand­ing home buy­er behav­iors and moti­va­tions can help home improve­ment retail­ers and mar­keters bet­ter con­nect with those who are seek­ing their prod­ucts and services.

For full access to data from this sur­vey and detailed infor­ma­tion on all home­buy­er demo­graph­ics, join HIRI as a mem­ber today. Book your con­sul­ta­tion to assess what HIRI mem­ber­ship would mean for your cross-func­tion­al teams.

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