Homeowners and rental property owners spent $340 billion on home improvements in 2015, which set an all-time high. What are people spending their money on, though?
Realtor.com examined the findings from a new report on remodeling spending by the Harvard Joint Center for Housing Studies. Of the homeowners who undertook those projects, an average of $20,327 was spent on room additions, the highest share among all types of expenditures. Owners also spent their money toward disaster repairs ($14,373), kitchen remodels ($10,237), exterior replacements ($6,232), outdoor attachments ($6,094), and bath remodels ($5,879).
Millennial owners spent the least on remodeling projects ($8,702 on average), and owners between 55 and 64 spent the most ($11,207).
Despite the surge in home renovations, remodeling spending is expected to grow by just 2% annually through 2025, according to the report. That’s a little lower than the 2.5% each year that homeowners paid from 1995 to 2015. Blame the anticipated slowdown on rising home prices and mortgage interest rates and not enough properties on the market to meet demand.