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.
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.
Kitchen – 42%
Bathroom – 33%
Deck, patio, porch or fencing – 31%
Landscaping or cement work – 30%
Bedroom – 27%
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.
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.
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.