Every year, homeowners embark on a mission to improve and upgrade their homes. In every project, the goal is to have a happy ending. A new joint study by the National Association of Realtors and the National Association of the Remodeling Industry dives deep into the reasons for remodeling, success in taking on projects and increased satisfaction in the home after a project is completed.
Homeowners and families in US households have undertaken a variety of renovation and remodeling projects over the past year, according to new insights from the 2022 Remodeling Impact Report. The main results are improved functionality and livability.
This year’s report analyzes a range of home improvement aspects, including why people choose to remodel, the overall cost of specific remodeling tasks, and what is fulfilled upon completion of a successful project.
“Our study showed that homeowners are prone to undertake a remodeling project for a number of reasons,” said Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors. “In some cases, homeowners were content to upgrade a room with a simple coat of paint, while in other cases families decided to take on the task of renovating an entire attic or basement to add additional living space to their home.”
The report finds that Americans spent $420 billion on home remodeling in 2020. Ninety percent of NARI members cited greater demand for remodeling contracting as the pandemic progressed. Three out of five NARI members – 60% – said the scale of projects had grown due to the pandemic, either through a larger project or through the remodeling of more than one space.
“This report is the first to measure the impact of the pandemic on the price and relative value of various remodeling projects,” said NARI President Chris Egner. “We are pleased that NARI members, who are among the most experienced remodelers, were able to provide realistic estimates of remodeling costs according to the criteria set out in the survey.”
Although 83% of consumers said they would have remodeled regardless of the pandemic, 86% said remodeling one area of their home then inspired them to remodel other areas of the home.
The exact reasons why homeowners decided to transform their living spaces have varied. 35 percent of owners said the most important result of their remodel was better functionality and livability. After completing their project, 22% said they had permanent and long-lasting results, materials and equipment. Fourteen percent reported beauty and aesthetics as a result of their makeover.
Home protection clearly sparked an ongoing and unprecedented tidal wave of home and backyard projects.
“The pandemic has changed the way we use our homes, and many of those changes will remain,” Lautz said. “As a result, homeowners have had to reconfigure or redesign the way they use their home and maximize space.”
More than a third of owners (35%) hired a professional for their entire project, while 28% said they hired someone to do the work but bought the necessary materials. Twenty-two percent of homeowners completed the entire project themselves from start to finish.
The report aimed to calculate consumers’ views on their projects after completion. Projects that compelled renovators to stay home or remodeled workspaces that elicited an increase in happiness from residents received a high Joy Score, with 10 being considered a perfect Joy Score. Some tasks that scored 10 points included: painting the entire interior of a home, painting a room, adding a home office, refinishing hardwood floors, renovating closets, and improving insulation.
Hardwood Floor Refinishing received a Joy Score of 10 because the homeowners were happy and content in their home after the renovation. 64 percent of those surveyed stated that they felt more comfortable when they were at home after installing their parquet floor. Another 64% said the mere thought of the completed project gives them a “great sense of accomplishment.”
With the increase in long-term remote working options, adding a new home office is another task that has earned a perfect Joy Score based on homeowners’ feelings. Ninety-one percent of consumers said they have a greater desire to be at home now that their office is in place. 73 percent said they feel an increased sense of happiness when they are at home.
The NAR/NARI report examines numerous remodeling projects and provides a cost recovery estimate for the projects. The actual cost of any remodeling project and cost recovery is affected by many factors including project design, quality of materials, location, age and condition of the home, and homeowner preferences.
“Quite often, an added benefit of home renovations is the possibility of an increase in the value of the home, which is one reason some people remodel,” Lautz said. “This is particularly beneficial for homeowners who are considering selling their home or converting the home into a rental property.”
Real estate agents gave an estimate of the likely dollar value that each project would add to a home during resale. Comparing this dollar value to the estimated cost of each job provided by NARI members, a percentage of the project cost recovered was tabulated. For interior design projects, the highest percentage of reimbursement came from refinishing hardwood floors at 147%.
New wood flooring was 118% and improved insulation was 100%. For the exterior projects, new roofs and a new garage door each recouped 100% of the project cost.
Kitchen upgrades were also popular with homeowners, with the task earning a Joy Score of 9.8. The top reason (32%) for a kitchen renovation was a desire to upgrade worn surfaces, finishes or materials. The second most common reason (20%) was to add features and improve livability.
According to NARI Remodelers’ cost estimate, the average kitchen remodel would be around $45,000. Realtors estimated that $30,000 of that amount could be recovered as a result of the renovation. That would be a recovery rate of 67%.