Survey: Consumers Have Unreasonable Remodeling Budgets
Consumers Have Unreasonable Remodeling Budgets
Rising costs for construction materials and labor are making home improvement projects more expensive, yet too many homeowners are setting unrealistic budgets, according to the 2019 Kitchen and Bath Market Index report, which reflects second-quarter figures. The report conducted jointly by the National Kitchen & Bath Association and John Burns Real Estate Consulting, is based on responses from 457 NKBA members.
Estimated Cost of Common Interior Remodeling Projects
- New master suite/owner’s suite: $125,000
- Kitchen upgrade: $35,000
- Complete kitchen renovation: $65,000
- Bathroom renovation: $30,000
- Adding a new bathroom: $59,000
- Basement conversion to living area: $40,000
- Attic conversion to living area: $75,000
- Insulation upgrade: $2,100
- New wood flooring: $5,500
- Hardwood flooring refinish: $3,000
- HVAC replacement: $7,475
Source: “2017 Remodeling Impact Report,” National Association of REALTORS®
Overall, the home improvement industry remains strong, and remodelers are optimistic about continuing growth and demand. However, the increases in consumer spending on remodeling are mostly attributed to rising costs rather than a more robust selection of choices, the report notes. With “higher costs across the board, clients are learning they have to spend more to get the design they want,” one survey respondent commented.
However, not all consumers have gotten that message. Some contractors blamed the higher costs on recent tariff disputes over imported products, such as quartz. “Clients increasingly have nicer tastes but lower budgets,” another survey respondent commented.
Many consumers may not be clear on the true costs of home improvement projects. A separate study earlier this year from Discover Home Equity Loans, based on 1,200 consumer responses, showed that consumers significantly underestimate the cost of remodeling projects. For example, 64% of consumers say their home improvement project will cost under $15,000. However, bathroom remodels can cost anywhere from $19,000 to $61,000; significant kitchen remodels can cost as much as $125,000, according to the study.
The availability of skilled professionals, cost of materials, and trade issues top the list of overall challenges among contractors, according to the NKBA/John Burns report. A lack of skilled workers is the top concern among building and construction firms, while designers point to a slowing luxury market and shift to lower price points as the biggest barriers to growth.