Executive Summary

The spending patterns that characterize how we service and customize our homes represent a distinct and valuable area of the economy. Our homes are typically our biggest purchases, our most valuable assets, and our largest source of savings. At the same time, homes are deeply intimate places in a non-economic sense. They’re where we spend most of our time — where we grow our families, raise kids, age, retire, study and recreate.

Home improvement continues to be a buzzworthy topic – especially with dominance of home improvement-focused TV shows, the benefit of choosing renovation over relocation, and the fluctuating pros and cons of renovating in a high-dollar real estate market. But when it comes down to brass tacks, homeowners find it’s not all about aesthetics: They must address the necessities too.

In this year’s State of Home Spending report, HomeAdvisor’s research team took a deep dive into how we prioritize our savings, our spending and our preference for rooms, as well as how we value having a defined sense of place for ourselves and for our families.

The home services market is a dynamic economic engine that employs millions of service professionals in stable, well-paying jobs while delivering joy and satisfaction to tens of millions of consumers. HomeAdvisor’s State of Home Spending helps us understand how this engine continues to develop and change based on the ongoing evolution of consumer tastes, sentiments and behaviors.

Part 1: Spending on Home Services

1.1 Home Improvement Spending & Projects Completed

Home improvement spending across all consumers in 2018 averaged $7,560. However, spending differs dramatically from state to state, with high cost of living states like Massachusetts, Hawaii, Rhode Island and Maryland among the top five, and lower cost of living states like West Virginia, Wyoming, New Mexico, South Dakota and Maine in the bottom five.

Nationwide, spending per household is up 17% from 2018, according to HomeAdvisor data. Likely contributing to the ongoing increase in per-household spending are factors such as the increased rate of wage growth for consumers, the growing cost of skilled trade labor, the cultural focus on design aesthetics and quality of life, and newer and better home improvement tools.

1.2 Home Maintenance Spending & Projects Completed

For every $1 spent on home maintenance, home owners are spending an average of about $5 on home improvement.

Home maintenance is a critical part of homeownership. Our 2019 State of Home Spending Report marks the first time we’ve studied consumer behavior for home maintenance at the same time we’ve looked at home improvement and home emergency spending.

In the last 12 months, homeowners spent an average of $1,105 on home maintenance projects, completing an average of 6.7 home maintenance projects per year.

Every homeowner must strike the balance between spending on home improvement and spending on home maintenance to prevent costlier repairs in the future. For the average homeowner in our study, this balance was struck with a ratio of about 5 to 1. In other words, for every $1 spent on home maintenance, homeowners are spending an average of about $5 on home improvement.

The large gap between the two perfectly captures the reality that, even though it’s important, we do not prioritize home maintenance. Instead, we favor big-ticket projects like kitchen and bathroom remodels.

1.3 Home Emergency Spending

The average home emergency spend is a relatively manageable $416; however, that is lowered significantly by the people fortunate enough to have no home emergencies. Consumers who did have an emergency paid an average cost three times higher, at $1,206. This means that while there is a less than 50% chance a homeowner will suffer a home emergency in a given year, the average cost to address an emergency will be much greater for those who do.

Home emergency spending, just like home improvement spending, varies dramatically by state. However, unlike home improvement spending, which is largely guided by average cost of living, home emergency spending is largely guided by weather events such as tropical storms, intense thunderstorms, flooding and damaging hail — with states like Texas, Alabama, Georgia and Louisiana leading in spending.

Perhaps counterintuitively, higher home age does not predict higher emergency spending. In fact, the opposite is true. Looking at home age alone — with no other variables — a homeowner will spend an average of $3.70 less in emergency spending per year for every year their home was built. For example, the owner of a 100-year-old house will spend, on average, about $370 less per year on emergency spending than the owner of a brand-new house. (A multivariable prediction of the factors that predict total home spending is included in Part 2 of this report.)

1.4 Top Home Improvement Projects

Cost estimates for the most popular home improvement projects are available in our True Cost Guide:

1.5 Reasons for Overall Home Improvement

What is striking about these findings is that the amount of home projects in which damage is the motivator suggests that homeowners are neither prioritizing annual home maintenance nor distinguishing between home improvement and home maintenance.

1.6 Most Planned Projects For Next Year

Part 2: Home Characteristics

2.1 Home Characteristics that Predict Total Spending

After examining a number of home characteristics, including the income of the owner, the number of projects completed and other factors, we found that the following predicted overall expenditures on home services with a high degree of statistical significance after controlling for each of the included variables:

Part 3: Demographic & Geographic Differences

Our research uncovered some interesting generational and gender differences. Some of these differences are unsurprising, and some are quite novel. All of them will help to shape a deeper understanding about how attributes across incomes, genders and age groups impact the overall home services market.

Of course, it is important to qualify that all forms of statistical differences across group central tendencies are just that: differences across central tendencies. These broad group differences don’t necessarily predict what any individual will do.

3.1 Behavioral Differences Between Genders

Men are nearly 50 percent more likely to call themselves the ‘sole’ decision maker. Just 43% of women surveyed say they’re the ‘sole’ decision maker versus 67% of men.

Women report completing an average of 9% more home improvement projects than men and a median spend about 7% higher than men; however, men have reported spending an average of 17% more than women. In other words, women consistently spend the average, while men tend to be cheaper overall. But when men do decide to make significant home expenditures, they are more extreme.

3.2 Generational Differences

While our sample sizes for Generation Z and the GI generation are too small to make any sound inferences, we do capture very important trends from the remaining four generations: millennials, Generation X, baby boomers and the silent generation.

Reasons for home improvement ranged across generations, with a peculiar trend of millennials emulating their grandparents’ preferences for home improvements favoring aesthetics and design, with Boomers and Generation X favoring modernization over aesthetics.

This likely reflects the trending design aesthetic of the millennial homeowner — a combination of mid-century modern and older design styles. Millennials are simply less likely to consider their design aesthetic essentially modern.

Of course, that’s not to say that millennials eschew all things modern. In fact, they’re more than twice as likely as Generation X to list adding to their home’s value as an important motivator for home improvement projects, and about three to four times as likely relative to baby boomers and the silent generation. This is likely due to a combination of typical youthful focus on wealth accumulation and millennials’ comparatively poorer financial situation driving a hunger to recover relative to their older cohorts.

The generational gap in priorities is a dramatic example of the millennials’ current struggle to catch up financially with older generations. Even 10 years after the great recession, the generation that came of age during the collapse and slow recovery is trying hard to get its feet back on the ground.

Millennials’ need for financial growth is manifesting itself not only in intergenerational differences in spending priorities, but also in methods of price and cost searching. Respondents report generational differences in their methods for researching home improvement costs, with Generation X and millennials preferring online and retail options. Baby boomers and the silent generation also used the internet, but they relied on previous contractors and retail options more evenly.

3.3 How Does Spending Change with Income?

Interestingly, our research finds that homeowners have more savings readily available than the average American. The Wall Street Journal recently reported that one quarter of working adults have no retirement savings whatsoever, 42% of workers aged 18-29 have nothing set aside whatsoever, and 40% of working adults would have a hard time affording a $400 emergency.

3.4 Affirming Similarities Across Political Identification in Our Hyper Partisan Era

In our polarized and partisan era, it’s easy to find differences across political groups. This year, we decided to take a different approach to our research and examine similarities.

• 37% of Republicans have children under the age of 18 in their households, only slightly more than the 33% of Democrats.
• 5.93% of Democrats are expecting their household to grow in size in the coming year, relative to 5.92% of Republicans.
• The respective average home value for Democrats is $225,000 only a few thousand dollars less than the $235,000 for Republicans.
• 88% of Republicans say they could come up with $1,000 to cover an emergency repair, compared with 86% of Democrats.

While there are differences between Republicans, Democrats and independents, such as attitudes and differential expectations around the economy (Republicans are currently more than twice as likely as Democrats to be highly confident their personal economic situation will improve in the next year), a common bond is the similarities we share as homeowners. Home emergencies and home maintenance needs do not distinguish between red or blue, and trends in home spending show our commonality.