Home Renovation Projects to Continue in 2023, Despite Economic Uncertainty

Renovation projects were canceled by less than 1% of homeowners, despite economic uncertainty, according to Houzz Inc. survey.

The vast majority of homeowners are moving forward with their home improvement projects, according to a new study from Houzz Inc., the platform for home remodeling and design.

Conducted in October 2022, the survey of nearly 4,000 homeowners found that only 1% of homeowners report having canceled a home improvement project in 2022. Meanwhile, 37% of respondents completed a project in 2022 and nearly one-quarter are planning to start a home improvement project in the next 12 months (23%).

Among those planning to start renovations in the next 12 months, 67% want to stay in their current home/lot rather than buy a new home that fits their current needs. More than half of this group will kick off their project in January 2023 or earlier (58%), with top projects including bathrooms (37%) and kitchens (33%).

To tackle these substantial projects, 91% plan to hire a professional, including general contractors (46%), electricians (27%), and cabinet makers (25%), among others. The planned median spend on these projects is $25,000, meaning that half of homeowners plan to spend more than that amount, while the other half has a smaller budget in mind.

“Renovation activity and planned renovations remain strong among homeowners, despite various industry and economic headwinds,” said Marine Sargsyan, Houzz staff economist. “For many, conditions like limited choices of available homes and rising interest rates are driving them toward renovations and improving their current home since the cost of moving into a house that fits their current needs has become so expensive. Additionally, more than half of the homeowners we surveyed have no intention of selling or moving out of their current residences in the next 20 years or ever.”

Those who canceled a home improvement project in 2022 (less than 1%) cited current economic conditions, including inflation, uncertainty and resources to fund the project as their reasons for cancellation. Meanwhile, 11% of homeowners would like to start a home improvement project but are currently holding off for reasons like inflation (54%), unable to afford the project currently (39%), non-urgent projects (30%), shortages of products and materials (28%), and searching for the right professional to hire (23%). Nearly one-third of homeowners surveyed are currently in the midst of a home improvement project (29%).

Additional findings include:

Home exteriors get a refresh: Among those currently updating their home exteriors, respondents noted that windows or skylights top the improvement list (43%), followed by exterior doors (42%), exterior paint (36%), porches or balconies (32%), and decks (31%).

System updates are key: With an aging housing stock nationwide, systems updates are common with electrical (49%), plumbing (48%), heating (34%), and security (34%) topping the list among those currently updating their homes.

Supply chain challenges persist: When asked about the biggest renovation challenges, those who completed projects in 2022 (37%) pointed to supply chains with over a third citing trouble finding the right products and materials (37%). Other top challenges were finding the right professionals (35%) and staying on budget (27%).

Renovating over moving: When asked why they are renovating instead of moving to a new home, homeowners cite wanting to stay in the current home or lot as the No. 1 reason (63%), followed by wanting to stay in the same neighborhood (34%), wanting to personalize features (32%), renovating being more affordable (23%), and renovating being a better return on investment (22%).

*Data was sourced from an online survey fielded to U.S. Houzz users between October 14 to October 19, 2022. N=3,884.