Dive Brief:
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Homeowners spend an average of $4,500 more on appliances, furniture and home-improvement work in the two years after purchasing a new, single-family detached home than do owners who didn’t recently move, according to a National Association of Home Builders’ analysis of Bureau of Labor Statistics data.
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Average buyers of an existing, single-family detached home spent more than $4,000, with most of those expenses occurring in the first year. Where spending sometimes beats that average is in remodeling work, which averaged $6,103 for an existing homebuyer and $4,055 for an existing homeowner in 2015.
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The NAHB found that spending more on appliances, furniture and remodeling work did not cause owners to cut back on other expenditures, such as entertainment, travel and dining out.
Dive Insight:
When someone buys a new home, additional costs come with the territory – especially early on, as the owner readies their space for living.
The residential remodeling market is forecast to increase by 2% every year through 2025, and the baby boomer and millennial generations are expected to drive that growth, according to the Harvard Joint Center for Housing Studies. Boomers will remodel for better accessibility, while millenials will continue to purchase older, less expensive homes with plans to remodel.
How much money a homebuyer will spend on new items or remodeling after the purchase may also depend on how much they’ve had to spend on the move already. Besides the house itself, buyers must cover the costs of a moving company if they use one, moving insurance, the home inspection, appraisal fees, closing costs and more. As a result, there might not be much left to spend on new furniture or appliances immediately after the move. New websites like Zillow’s RealEstate.com aim to help buyers understand the total costs of homeownership, both initially and throughout the home’s life.
Remodeling spending isn’t just up among recent homebuyers. Owners looking to put their homes on the market are taking on such work, too. Approximately 80% of homeowners have plans this year to update their home to either increase its sales value or better fit their own needs longer, according to HomeAdvisor. Two-thirds of owners expect to spend the same or more on home improvement in 2017 as compared to 2016.
