Nearly 60% of all spring home shoppers are considering a home that needs renovating, as rising home prices and limited entry-level inventory continue to be a hurdle, according to Realtor.com®'s spring home buyer survey.
More than half of home buyers considering a home that needs some TLC are willing to spend more than $20,000 on the renovation, while the vast majority—95% of them—are optimistic they will get a positive return on their renovation investment. Realtor.com® conducted the online survey through Toluna Research in March, consisting of 1,015 respondents planning to purchase a home in the next 12 months.
"The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating," said Danielle Hale, Realtor.com®'s chief economist. "Replete with inspiration at their fingertips—like Pinterest, Instagram, and various home renovation TV shows—some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget."
According to the survey, roughly three out of five home shoppers under 55 years-old are considering a home this spring that needs renovating. Middle-aged shoppers, 35-54 years-old, were the most likely to consider a home that needs renovating, at 65%. Middle-aged shoppers are more likely to be current homeowners and their experience with maintaining and improving their existing home may give them the confidence to tackle renovations, especially when motivated by trying to find a home that fits their needs within their budget, Hale noted.
Just 59% of younger home shoppers aged 18-34 years-old, who are less likely to be current owners, are considering a home in need of renovation. Less than a third of buyers older than 55 years-old would consider a home that needs renovations.
Just over half of spring home shoppers considering homes in need of renovation—51%—are willing to spend more than $20,000 on their home renovation. Twenty-eight percent are willing to spend up to $10,000, and 22% are willing to spend between $10,001 and $20,000.
According to Realtor.com data, a major kitchen remodel will cost around $66,000, while a minor remodel will cost around $22,000. Similarly, an upscale bathroom remodel will cost around $64,000, while a midrange bathroom remodel runs about $20,000.
While home renovations can be costly, home shoppers are optimistic they will get a positive return on their investment. According to the survey, 95% of home shoppers considering a home that needs renovations expect a positive return of some sort on their investment. Nearly a quarter—24%—expect a positive return of more than 50%.
A kitchen upgrade was the No.1 home renovation chosen by nearly 30% of respondents considering homes that need to be renovated. This is not particularly surprising since both this year and last year an updated kitchen was first among the top three features sought by potential home shoppers. A kitchen upgrade was followed by a bathroom renovation at just over a quarter—26%, and new wood flooring at 20%. Eighteen percent considered a hardwood flooring refinish, and the same share considered a complete overhaul kitchen renovation.
Among spring home shoppers considering a home in need of renovation, nearly 60% said home renovation television has made them more optimistic regarding home renovations, according to Realtor.com®'s survey. Whether it is seeing the project unfold in a tidy 30 minute segment, or just getting inspired by the before and after shots, home shoppers are turning to home renovations to make their dream home when finding one as-is turns out to be difficult.