Certainties in life: death, taxes and if you’re a homeowner, home repair and improvement projects. Even if you don’t plan for these projects, they come looking for you anyway, in the form of a leaky roof, flooded basement or other can’t-wait tasks.
Homeowners spent $522 billion on home improvements from 2017 to 2019, taking on an estimated 115 million projects, according to newly released data from the U.S. Census Bureau’s American Housing Survey. That’s a $72 billion increase in spending compared with the previous two-year period.
And since that census survey period, homeowners have taken on millions more projects, and likely many more than in a typical year, as the world was staying home to slow the spread of the coronavirus in 2020. In fact, as of mid-August, 61% of U.S. homeowners had taken on home improvement projects since March 1, according to a NerdWallet survey conducted online by The Harris Poll.
“The pandemic probably generated a lot of repair and rehab projects, for a couple of reasons,” says NerdWallet’s home and mortgage expert Holden Lewis. “First, homeowners were present to supervise the work or do it themselves. Second, people seized the chance to fix up their homes before listing them, preceding skyrocketing home sales in late summer.”
We analyzed findings from the American Housing Survey and two nationally representative NerdWallet surveys of more than 1,400 homeowners conducted online by The Harris Poll in August and September. With this perspective, we get a more holistic picture of homeowners’ recent, current and upcoming approaches to handling projects around the house.
Key findings
Home improvement spending is up. American homeowners spent $522 billion on home improvements from 2017 to 2019, according to census data, an increase of $72 billion compared with the previous two-year period. Typical spending per project also rose from $1,350 to $1,500.
Homeowners are making improvements during the pandemic but reluctant to hire professionals. About 3 in 5 homeowners (61%) have taken on home improvement projects since March 1, according to the August NerdWallet survey. When we asked in September, however, more than half (53%) of homeowners wouldn’t allow home repair or improvement professionals in their home due to safety concerns about the coronavirus.
Many homeowners are well prepared to pay for home improvements. Four-fifths (80%) of homeowners typically stick to the budget they set for home repair/improvement projects, and 75% have money set aside for this purpose, according to the September survey.
Do-it-yourself projects are still the minority. Homeowners DIY 37% of their projects, according to NerdWallet analysis of census data, which is roughly on a par with the number reporting DIY projects (38%) two years ago in our 2018 Home Improvement Report. The data indicates these DIY projects are lower-cost, likely not only because homeowners save money on labor costs, but also because homeowners are more likely to DIY less expensive projects overall.
Home improvements amid a global pandemic
More time at home in 2020 has meant more time for home improvements. About 3 in 5 homeowners (61%) have done home improvement projects since March 1, 2020, according to the August NerdWallet survey. Those homeowners spent $6,438, on average, on those projects.
Roughly a third (34%) of homeowners who did home improvement projects within the past two years say they took them on because they were spending more time at home due to pandemic-related social distancing measures, the September NerdWallet survey found.
The pandemic has also changed how homeowners feel about having contractors in their home. More than half (53%) say they wouldn’t allow home repair/improvement professionals in their home due to safety concerns about the coronavirus, according to the September survey. And more than three-fourths (79%) say if a home improvement professional had to enter their home, they’d be more cautious than usual due to safety concerns about the coronavirus.
Handy homeowner tip: Communicate any household safety measures before contractors come to your home. Set their expectations about mask-wearing and cleanliness as you would set their expectations about the scope of the project you’re asking them to do.
Paying for home improvements
Home repair and improvement projects can wind up being much more expensive than initially anticipated — finding out your plumbing leak has resulted in a rotten subfloor or your shingles were hiding shoddy repair work, for example. But according to the September NerdWallet survey, 80% of homeowners say they typically stick to the budget they set for such projects, compared with 76% when we asked in 2018.
Sticking to a home improvement budget means accurately estimating a project’s cost in the first place and adding a 10%-20% buffer for unexpected surprises that result in cost overages. This home improvement project estimator reveals median costs for a variety of projects in the American Housing Survey. From there, homeowners have to determine how they’ll pay for the project.
Three-fourths (75%) of homeowners say they have money set aside for home repairs/improvements, according to the September survey, compared with 69% when we asked in 2018. And while 52% of homeowners who have done projects in the past two years say they were “easily able to pay for the majority of them without tapping into savings, going into debt, or making sacrifices,” that leaves about half who were not.
Thankfully, there are numerous financing options available. According to the American Housing Survey, cash from savings covers the majority of projects, but more expensive projects are paid for with sources like cash-out refinancing, home equity loans, contractor arranged financing and even credit cards. “Something else,” the survey response chosen for 6% of projects, likely refers to personal loans, borrowing money from friends or family, and government grants available for home improvement projects.