Renovation Spending is Up with Millennials and First-Time Homebuyers

Millennials who renovated their homes spent an average $26,200 last year on the upgrades – 7% more than the previous year, according to the Houzz & Home Survey.

First-time homebuyers spent $33,800, representing 22 percent more.

Millennials are becoming homeowners much later than baby boomers did, but when they get there, they’re spending more for renovations, a positive sign of confidence in the housing market. The results are based on more than 100,000 responses to the survey, which was emailed to registered users of Houzz in the United States.

“It’s a pretty strong reflection of the housing market condition,” Nino Sitchinava, principal economist at Houzz, told CNBC. “The home renovation market has mostly recovered, and is in line with the prerecession peak.”

However, those 55 and older continue to outspend millennials, nearly three times as much. Overall, homeowners who renovated last year spent an average of $60,400, about in line with the $59,800 on average in 2015.

Another bright spot for housing confidence was large projects like kitchens, bathrooms, and exterior features, which Sitchinava said also got a boost in 2016. “Discretionary spending is clearly leading,” she stated, “Those projects are typically done when times are good.”

This year is set to be another banner year, according the survey, with more than half of homeowners surveyed saying they plan to start renovations in 2017. They’re looking to spend 4 percent more than in 2016.