HomeAdvisor has released its 2020 State of Home Spending report and it shows not only just how impactful the pandemic has been on home improvement (and it has been) but also that the market has a new spending leader.
The COVID Effect
The U.S. alone has over 12 million coronavirus cases and resulting 257,000 deaths (as of the writing of this story). It's changed the way we work, socialize, the way we live, everything. A big change has been that all of that—work, hangin out with friends, getting a nice meal from a restaurant, etc—now happens mostly in the home. The pandemic has consolidated most of our daily and nightly lives to the home.
Seventy percent of homeowners say they've had to do more cooking in the home because of COVID-19, 50% say there's more working from home, 40% say their needs for home entertainment is up, and more than a quarter say they have more outdoor living needs. These shifts in how people live are, predicatably, spilling over into how they budget. As a result, homeowners en large have reallocated spending from commuting, vacation, and restaurants, to home services.
Since last year, average remodeling spending by homeowners has increased year-over-year by more than $4,000, bringing 2020 spending to $13,138.
Shortages and Delays
While increased spending reflects a new emphasis on the home as a result of COVID, it's not the only impact the virus has had on spending.
"This year's topline growth in spending and projects is a story of increasing costs of supplies, increasing cost of labor, and homeowners shifting spending from things like entertainment and travel to their homes," said HomeAdvice Chief Economist Mischa Fisher in a statement.
The no. 1 reason for delays and budget issues, as cited by a quarter of respondents, was material and product shortages and prices as a result of COVID-19.
Where Money's Going
The top projects for this year shifted slightly as interior painting projects overtook bathrooms, which came out on top in 2019. We have a full list of the top projects here.
Millennials Have Arrived
A common phrase in every housing-related industry over the past five years has been: "The Millennials are coming." For remodeling, it finally happened in 2020.
Since 2019, Millennials have increased their home improvement spending by 60% to over $9,000—across all home services, their spending doubled year over year. Millennials are also completeing on average 30% more projects, while Boomers increased their project totals by only 10%.
Millennials accounted for more homebuyers in 2020 than any other generation. When considering those figures along side generational spending in home improvement, there is currently no more lucrative client for a remodeler than a millennial homeowner (at least on paper).