In the first quarter of 2024, homeowners spent $463 billion on renovations, although this figure represents a decline from peak spending levels and is expected to decrease further in 2025. Despite a projected reduction in overall renovation spending, residential contractors can still find opportunities in high-demand areas such as kitchen and bathroom remodels, which remain top priorities for homeowners. Notably, over 51% of homeowners spent $25,000 or more on renovations in 2023, reflecting a steady increase in renovation budgets. The average median spend on kitchens rose to $24,000, while bathroom renovations averaged $15,000. Contractors should be aware of the extended timelines for kitchen projects, with planning often taking over nine months and actual construction around five months.
Contractors should also note that homeowners frequently exceed their renovation budgets, primarily due to the high cost of materials and unexpected complications. Popular renovation projects include not only kitchen and bathroom upgrades but also improvements to heating, cooling systems, and outdoor security. The demand for renovations is influenced by factors such as social trends, income levels, and the desire for personalized, high-quality finishes. For the highest return on investment, projects like refinishing hardwood floors and upgrading insulation are recommended. Additionally, exterior improvements like roof replacements and energy-efficient windows offer substantial ROI and can enhance overall property value and efficiency. Understanding these trends and budgetary behaviors will help contractors tailor their services and advice to meet evolving client needs and expectations.
