Low inventory causes more buyers to consider fixer-upper

First-time home buyers are showing a stronger desire for taking on remodeling projects. First-time buyer-renovators in 2016 spent $33,800, on average, on their projects –a 22 percent increase over 2015, according to the sixth annual Houzz & Home survey of more than 100,000 respondents in the U.S.

“Younger and cash-constrained first-time buyers are responding to the low inventory of affordable homes by purchasing properties that require more than just cosmetic upgrades,” says Nino Sitchinava, Houzz principal economist. “Not surprisingly, we are seeing their spending on home renovations increasing significantly in 2016 and expect this trend to continue through 2017.”

Both first-time and repeat buyers are taking on larger scope projects, such as remodeling up to four rooms at the same time, the Houzz survey shows. Kitchen and bathrooms continue to be the most popular rooms in the house to renovate.

And while “recent home buyers drive a significant share of home renovations today, repeat buyers are investing twice as much in their home as first-time home buyers,” Sitchinava notes.

Baby boomers and earlier generations, age 55-plus, continue to spend three times more than millennial homeowners aged 25 to 34.

Overall, homeowners spent $60,400 in 2016 on home renovation projects, up from a $59,800 average in 2015.

What remodelers spent renovating homes in 2016

  • Kitchens: $19,100
  • Master bathrooms: $11,700
  • Living/family rooms: $5,400
  • Master bedroom: $3,400
  • Laundry room: $2,800
  • Dining rooms: $2,600
  • Guest bedrooms: $1,900

Source: “Houzz & Home Survey,” Houzz (May 4, 2017)

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