Spending for Home Remodeling Projects is Expected to Rise into 2022

Spending for home remodeling projects is expected to rise into 2022

A new Harvard University study predicts that spending on home remodeling and maintenance will increase by 8.6% through the middle of 2022.

Integrators are seeing an increase in opportunities from projects coming from homes that already exist. The latest Leading Indicator of Remodeling Activity (LIRA), released by Harvard University’s Joint Center for Housing Studies, predicts that spending on home remodeling and repairs will accelerate in the second half of 2021. This trend will continue into 2022, with remodeling spending increasing by 8.6%.

The LIRA indicates short-term changes in national home improvement and repair spending to private homes. The indicator measures an annual rate of change and helps to predict future turning points in the business cycle for the home improvement and repair industry. Through this index, it becomes possible to predict the next four quarters of spending in this industry. The LIRA was initially developed in 2007 but then re-benchmarked in 2016 to include a broader measure of American housing. The LIRA (A Developing a Leading Indicator for Remodeling) is released in the third week after each quarter’s closing.

According to Chris Herbert, managing director of the Joint Center for Housing Studies, it is likely that home remodeling will grow faster in the next few years due to factors such as ongoing strength of home sales and house price appreciation. Chris adds that a significant rise in permits for home improvements indicates that the owners are still investing much money in renovation projects.

From the Center’s Remodeling Futures Program, Abbe Will says that the recent increase in building material sales at retail outlets suggests that the home improvement market is on an upswing. Abbe says that the cost of residential renovations is projected to exceed $380 billion by the middle of next year.

Following the pandemic a year ago, many economic indicators are showing extreme fluctuations from changes brought on by the pandemic. The Q2 2022 projection relies on two extrapolated data inputs: housing starts and residential remodeling permits. This is meant to mitigate the substantial growth variability generated by these year-over-year comparisons.

When input details are not smoothed, the LIRA model will report an unlikely annual growth rate, twice what has been reported; however, The Remodeling Futures Program will continue to monitor input volatility.

Kitchen Renovation Cost Planning

No matter what, a kitchen is always the heart of any home. However, when it falls into disrepair with an outdated design and worn-out fixtures. It will make you feel just as tired and run-down as your obsolete kitchen space. However, bringing your kitchen remodeling plans to life requires thoughtful planning so that you stay within your timeline and budget.

Failure to make an accurate kitchen remodeling plan is the most common mistake people make when remodeling their kitchen. Without proper planning, you can be left with a kitchen remodeling cost exceeding your budget and leaving out features or upgrades vital to you. Given below is a guide on the average costs, along with expert tips to budget and save in your next kitchen renovation project.

Average kitchen remodeling cost

According to Remodeling magazine, a kitchen will cost between $28,835 and $163,987, depending on the changes. Jason Bernier, the owner of a Connecticut-based remodeling company, says that his kitchen remodeling projects typically start in the $50,000 range.

A recent study by Houzz & Home on renovation trends found that major renovations of large kitchens increased by 14 percent in 2020. Gabby Koontz of Classic Kitchen & Bath in Harrisonburg, Virginia, says the National Kitchen and Bath Association (NKBA) estimates that you should spend 10-25 percent of the value of your home on a kitchen remodel. Let’s examine other factors that determine kitchen remodeling costs in greater detail.

Factors that have tiny or big Effect on the Cost of a Kitchen Remodel

Size

The general cost of a kitchen remodel will depend on the size. A larger kitchen will cost more, while smaller spaces won’t be as expensive to fix up. A standard kitchen size measures around 15 feet in length and 9 feet in width. For a bigger kitchen space, you need to add more design elements that require labor and materials. A custom-sized kitchen will cost more than the standard 14 x 20-foot room due to the custom work involved. According to data collected by big players such as HomeAdvisor, the average cost for a kitchen remodel ranges from $82-$275 per square foot.

The extent of changes you want to implement

If you want to open up a closed kitchen by knocking down one or two walls and adding openings, expect more of an investment. Koontz says that when it comes to knocking down walls, clients have that “aha” moment. They’re all concerned about the wall being load-bearing without considering that they will also leave a gaping hole in their hardwood floor and ceiling. There is an accumulative effect. It all adds up.

How your kitchen is oriented

Kitchens located in the center of a house (with no external walls) will cost more due to plumbing and structural changes. A kitchen’s remodeling cost will be considerably higher if you have an island with granite and marble tops; they take longer to install. However, if you are looking to add value and contrast in design, adding an island will be a smart investment that can increase the resale value of your home.

Cabinetry and hardware

Cabinets can vary widely in terms of price and quality. As much as 35% of your budget may go towards replacing existing cabinets, depending on the style you purchase. Cabinets break down into three categories based upon cost:

Stock cabinets are your cheapest option, and they’re usually finished in standard sizes. Fewer options mean you won’t be paying more for these cabinets.

Semi-custom cabinets are a good alternative between stock and custom cabinets. They allow for limited customization but can still come in a range of finishes and colors. These cabinets are not customized to your kitchen’s layout. However, they will give you a new look and make your room feel fresh.

Custom kitchen cabinets are made to order in the sizes, styles, and finishes you want with the materials you desire. Though they can be expensive, custom-built cabinets are worth the cost for your time. They are cut perfectly to fit your exact specifications and can be made from high-quality materials. Even though custom cabinets cost more than stock cabinets, they will give your kitchen a unique and personalized look and feel.

Quality of materials

The quality of the material used in your kitchen remodel determines its cost and durability. It is essential to choose your materials wisely so that they can last you for a long time. The material you select will also determine whether poor-quality materials will require more maintenance over time. Generally, the high the quality of the materials, the more you will have to pay for them. This is because such materials will include specialized skills and labor. High-quality materials such as granite, marble, and good-quality cabinetry will cost more, and they are pretty durable. There’s a higher price tag for these items. Installation costs increase because you deal with high-end materials that need careful handling, prolonging the renovation time.

Features you want

The more features you add to your kitchen, the higher the cost. Additional features like fireplaces and built-in appliances are going to increase your budget. Keep in mind that these features may reduce your home’s resale value if they do not match the rest of your property. Whatever you decide on adding will have an impact on the cost.

Some of the features you may want to consider include:

Radiant heat flooring – this type of flooring is a good improvement for any room in your house, especially kitchens. These floors not only look stylish but are also eco-friendly and cost-efficient since they use less energy.

Built-in appliances – knowing where to place your built-in appliances in a custom kitchen is essential. The placement affects the style and layout of the room, so you have to think about this carefully before making any decisions.

Cabinet lights – these types of lights can be put on display when they are installed around cabinetry, such as cabinets. They provide a great source of light and add to the overall beauty of your kitchen.

A separate bar – having a bar as part of your kitchen gives you more room for leisure activities with friends and family. This creates an environment that is not just functional but also enjoyable.

Technology – According to the Houzz report, smart home tech is increasing in popularity. As a result, some people opt for expensive options with features like voice-operable faucets that could double or triple initial costs.

The Houzz report says that investments in innovative home technologies are rising, particularly in media, security, and lighting devices. A smart kitchen appliance might be friendly to have but could increase the cost of your home renovation project. For example, voice-activated faucets typically cost twice as much as similar devices that do not feature this technology.

Countertops – countertops are a significant part of any kitchen remodel, and they can affect the budget significantly. The type of material you select will impact your renovation costs; for example, marble or granite cost more than laminate countertops, while glass is even more expensive.

Lighting/Electricals – lighting systems and electrical wiring is an essential part of any kitchen remodel. This is because many places install lights in kitchens, including under the cabinets or above the countertops. Installing electrical wiring can be pretty expensive, depending on how complicated they are.

Flooring – if you want to update your flooring, this will become the costliest part of your kitchen remodel. As mentioned earlier, marble and granite are pretty expensive, but so is porcelain tile or carpets.

Aesthetic Considerations – some elements have nothing to do with the actual materials and construction of the cabinets, such as rounded edges, custom-fitted hinges, or wallcovering. They can drive up cost significantly.

Plumbing Fixtures – if you plan to have new plumbing and fixtures installed, you should budget more for these. While a complete bathroom renovation will require an even more significant investment, kitchen-specific changes can cost as much.

Other factors to consider

A few of the items that are behind-the-scenes in contributing to renovation costs for your kitchen remodel include:

Permit – Normally, the building contractor is responsible for arranging permits and should include these costs in his bid. However, any homeowner doing a renovation project will need to seek approval from their local council, which may require additional expense.

Mid-project changes – It’s possible that your vision of the perfect kitchen will evolve as work begins. These changes may require additional installation or supplies but could be just what you need to end up with a finished kitchen project that is better than imagined. However, they add to the cost of the kitchen renovation project.

Once construction begins, it’s no time to change your mind. Plan before your project begins to avoid unexpected costs that come with last-minute changes.

Waste disposal – Construction projects often require additional charges for waste disposal. If the project takes place in your own home, you may need to include these extra costs into your budget plan or hire a contractor who consists of this cost in their final estimate.

Budget planning for kitchen remodel

It can be challenging to create a budget for your kitchen remodel, considering the vast array of available choices and features. However, if you work with a certified kitchen designer, they have access to National Kitchen & Bath Association (NKBA) ‘s online calculator, making creating a realistic budget much easier.

When developing your budget, talk to friends and family members who have been through the experience. Avi’s Stuff will give you a good idea of what to expect and how much it will cost (according to their geographical location).

To create the best design for you and your family, think about what qualities are most important to you in your kitchen. Do you want an open-plan layout? A pantry area? Or do you have particular wants or needs when it comes to smart appliances? What kind of changes will be necessary to accommodate these needs–will the addition of a new kitchen island expand your counter space? Will the addition of a wine cooler be enough to convince you to add it? By answering these questions, you’ll better understand what changes will need to be made and how much it will impact your budget.

HomeAdvisor provides an estimated cost of common kitchen elements, such as cabinets and countertops. While you’ll pay between $80-160 per linear foot for standard stock cabinets, custom cabinetry will range from around $550-$1650 per linear foot. These costs numbers can give you a rough idea of what to expect before you engage a designer.

The next step is to make a “Top Five” list of the features you’ll need or find essential. After identifying the five must-haves, identify a list of nice-to-haves. Then, decide how much you can or are willing or able to spend on each item. This will help you and your GC in making your decision when it comes to budgeting.

Kitchen Remodeling Tips to Save Money

Start your planning early- The longer you plan for a remodel, the more potential savings become available. Depending on your design, building materials and features tend to go on special sale just before holidays if you know when to look and can use these sales to save money while still getting what’s best for you.

Go for minor changes – One of the exciting parts about kitchen remodels is how a little change can significantly impact your return on investment. A minor kitchen add-on leads to a 72% ROI, whereas more significant renovation ventures yield a 57%-54% ROI.

DIY – One way to save money on your renovation project is to do the work yourself. The more DIY-friendly tasks you can complete by yourself, like painting, the less it will cost in the long run.

Consider alternatives  – If you’re dreaming of a natural stone countertop, but can’t afford marble, go for other options that suit your budget. You can also save more than a lot of money by being open and considering different choices.

Reuse fixtures -If you already have an old cabinet, protect it with a marine-grade finish and top with a butcher block countertop to use as an island. This may not be cost-effective if you need to pay the antique value for the cabinet.

Refinish existing cabinets – Refinish the cabinets if they are still in good condition. Removing old hardware from them can be an additional expense when installing new ones, so try to paint and add new hardware instead.

Choosing the right kitchen remodeling team

People often encounter feelings of success when remodeling their kitchen. The National Association of Remodelers (NARI) 2019 industry report gave a kitchen renovation an awe-inspiring Joy Score of 10, with 95% of respondents said they have higher enjoyment and ease at home afterward.

Koontz says, “Every time a client says, ‘That went well,’ there was a professional team on the job.” Partnering with one contractor and one designer helps make all your decisions easier because they are already familiar with all materials and fixtures. They can suggest what’s best for you based on your budget.

Homeowners who are doing their own remodel may be hesitant to spend money on a kitchen designer because it might seem to be on the higher end. However, it saves them time and extra expense in the long run as they are taken through the process by experts with experience in this area.

Remodeling Prices in 2022

Are you considering a major renovation any time soon or in the future? A major home renovation can be costly and overwhelming for a homeowner. According to a Havard University study, there is an expected 8.6% rise in home renovation and maintenance spending all through 2022.

In addition, according to the latest Leading Indicator of Remodeling Activity (LIRA), there is an expected acceleration of annual gains in home remodeling and maintenance expenditure in the 2nd half of 2021. Furthermore, the figures are expected to remain elevated through mid-year 2022.

LIRA projects yearly growth in home repair and remodeling spending will rise to 8.6% by the 2nd quarter of 2022. Typically, it is released in the third week after each quarter’s closing.

LIRA provides a brief perspective of national home improvement and repair expenditure to homes occupied by owners. It was initially developed in 2007 and has been produced quarterly since then. It was re-benchmarked in April 2016 to a wider market measure based on the biennial American Housing Survey.

Measured as a yearly rate of change of its parts, LIRA is intended to project the yearly rate of change in expenditure for the current quarter and the next four quarters. It is also designed to assist in identifying turning points in the business cycle of the home repair and improvement sector.

According to Chris Herbert, the managing director of the Joint Center for Housing Studies, home renovations will likely accelerate faster than it is owing to the current strength of home sales, house price appreciation, and new residential construction activity. In addition, he claims that a major increase in permits for home improvements also shows that homeowners are progressively investing in larger discretionary and replacement projects.

Abbe Will, the associate project director in LIRA at the Joint Center, also supports an increase in the renovation market. According to Abbe, increased gains in the retail sales of building materials suggest that DIY activities progressively lift the renovation sector. Additionally, she claims that by mid-2022, annual renovation spendings on owner-occupied properties are expected to exceed $380 billion.

The majority of economic indicators depict acute percent changes from pandemic-induced lows months after the unexpected changes to the US economy due to the pandemic. The 2020 second-quarter projection uses smoothed data for a couple of principal model inputs to limit the excessive growth rate volatility produced by the over-the-years comparisons. These include single-family housing starts and residential remodeling permits.

Using unsmoothed data in LIRA would have depicted an unexpected yearly growth rate roughly twice as bigger as stated. The Remodeling Futures Program will gradually monitor input volatility.

Current Kitchen Renovation Costs-Average Expenditure, Ways to Budget, and Save

The first step to upgrading your existing space is planning the kitchen renovation costs. Below is an expert guide on the average renovation costs and extra tips to budget and save for a home renovation project.

The kitchen is a focal point in a home. Unfortunately, depending on different homeowners, a kitchen lacks the expected vibe, especially if it features worn-out fixtures and an outdated interior design. Whether it is a complete renovation, partially, or a simple partial facelift, implementing your kitchen renovation ideas requires planning to stick to your budget.

According to HomeAdvisor, the national average for a kitchen renovation is $25,600. Expect to pay between $27,000 for minor renovations to $150,000 for major changes with luxury fittings. According to Jason Bernier, Bernier Building and Remodeling Inc’s owner in Milford, Connecticut, his kitchen renovations begins from the $50,000 range.

The 2021 US Houzz & Home Study on renovation trends claims that investment in significant remodels jumped 14% in 2020.

According to Gabby Koontz, a certified kitchen designer with Classic Kitchen in Harrisonburg, VA, the National Kitchen and Bath Association (NKBA) recommends a kitchen renovation budget of 10-25% of your home’s value.

Factors Impacting Kitchen Remodeling Costs

• Kitchen Size

Typically, the larger a kitchen, the more it will cost you to remodel the entire space. A smaller kitchen will cost you lesser than expected. According to HomeGuide, the average cost to remodel a kitchen space per square foot is $100 to $250. Most homeowners end up spending between $12,800 to $21,200.

• Scope of the Renovation Project

How intense do you plan to move things around? Expect to pay more for your kitchen renovation if you want to open up a closed kitchen by bringing down a wall or two. According to Koontz, most clients who suddenly decide on knocking down walls do not take time to consider the effect it would have on other fixtures such as ceilings and hardwood floors.

• Cabinetry and Hardware

All Cabinets are available in a wide variety of costs and qualities. Moreover, according to the NKBA, installing new cabinets may cost as much as 35% of your budget. Below is a short breakdown of cabinet styles and costs.

1. Stock cabinets – they are the most affordable option. Stock cabinets are mass-produced to standard sizes. Additionally, they come in few and limited options for customization.
2. Custom cabinets. You can order these in the styles and sizes you need. Moreover, you can order custom materials and finishes. Custom cabinets are the most costly of these options.
3. Semi-custom cabinets. These are a compromise between stock and custom cabinets. Semi-custom cabinets are limited to industry-standard shapes and sizes but allow for custom finishes and colors.

• Materials and Features

According to the Houzz report, smart home tech purchases are steadily gaining popularity, especially for security, lighting, and media devices. Installing smart tech in your kitchen is a great idea, except it will drive up the overall price. A kitchen fixture operating on voice-on command will typically cost almost twice as much as one that does not.

The best way to know what entails a realistic budget for a kitchen remodel is to talk to your family and friends. Consult homeowners who have been through a kitchen remodel to share their experiences and overall costs.

When budgeting for a kitchen renovation, here are the areas you need to consider for smooth budgeting:

• Plumbing
• Wallcovering
• Flooring
• Electrical/lighting
• Appliances
• Countertops.

Additional factors to consider that impact the cost of a kitchen renovation include:

Repairs

During a kitchen remodeling, it is not uncommon to come across major issues hiding behind walls; for example, the wiring is improperly done. If you encounter such major repairs, chances are your kitchen remodeling budget will increase significantly.

Permits

Building permits are mandatory before any major construction/renovation projects across different states. In most cases, a building contractor pulls the permits and includes the cost in his fees. However, if you are building or constructing the home independently, consult with your local building authorities before any major renovation or construction work. As such, you will understand the steps required for permitting, inspection, and your expected budget.

Change Requests

Changing your mind mid-project about construction designs tends to be costly. Ensure you finalize all your options and plans during the design phase to avoid the additional cost that changes add to your budget.

Disposals

Most municipalities will charge you for disposing of construction waste. Generally, contractors include this charge in their estimates. Therefore, add this cost to your budget if you are doing the renovation/construction work yourself.

Location

Your location can also impact your overall kitchen renovation costs. Typically, some states have a higher living cost than others. A kitchen renovation project may be more expensive in Los Angeles, California, than in Nashville, Tennessee. Contact your local contractor to give you price estimates of the different elements of a kitchen renovation.

Labor

Labor costs can cost about 22% of your remodeling budget, give or take special circumstances. Labors fees are mostly separated from design fees-which are around 4% of your budget according to NKBA. As such, the total cost to actualize your dream kitchen maybe about 26% of your entire remodeling budget.

How to Create or find A Budget for Your Kitchen Remodel

According to Koonz, certified kitchen designers have access to NKBA’s budgeting calculator. Therefore, if you are working with an accredited designer, creating a realistic budget for your kitchen remodeling project becomes easy.

Regardless, ensure you know what your dream kitchen looks like. Ask yourself whether you want an open plan kitchen, smart appliances, or pantry. Do you need to tear down walls, bump out an exterior wall, or move plumbing lines?

A breakdown of the costs of individual kitchen fixtures and elements such as countertops, cabinets, and flooring helps you budget wisely. For instance, a stock kitchen cabinet may cost you $80-$175 per linear foot, whereas a custom cabinet may cost you $550 to $1,600 per linear foot. Having access to such data can give you an idea of costs before hiring a kitchen designer.

According to Koonz, once you have the detailed information on costs, your next is ideally to create a Top 5 List including things you absolutely need, such as accessibility features. Furthermore, she recommends that once you have a list of these must-have items, you can proceed to list the “nice-to-have” items. Such items are essential and beneficial when budgeting a kitchen remodel.

If your bank isn’t so flexible, At Schwalb Builders, we believe that the renovation will increase your house value. Therefore, we offer our own financial solutions.

How to Save Money (and more) on a Kitchen Renovation

Surprisingly, the lesser the kitchen budget, the more your Return on Investment (ROI). For example, a partial/ minor kitchen renovation brings a 70% plus ROI, unlike 54-58% for full/ major kitchen renovations.

Below are expert-recommended ways to help you save money on your kitchen remodeling:

Do It Yourself (DIY)

Doing some of the renovations yourself helps you save on labor costs. Hire a contractor who can help you with some of the specialized tasks such as plumbing. You, on the other hand, can take on simpler tasks such as painting.

Choose Alternative Materials

A simple fixture can vary a lot in terms of price and materials. According to Koontz, if a natural stone countertop is on your must-have list, but you cannot afford marble, you can opt for granite significantly reduced in price. Be open to alternatives if your end goal is to save money.

You can purchase refurbished appliances and materials. When it comes to a kitchen renovation, appliances consume a larger chunk, meaning you can lower your overall costs if you can save money here. Such is especially true for refrigerators/freezers and dishwashers. Purchasing refurbished or slightly used appliances are one way to reduce your overall cost.

Upcycle Fixtures

For example, if you already have a vintage cabinet, secure it with a marine-grade finish and top with a butcher block for an upcycled kitchen island. Doing so may not save you money if you have to pay antique value for the cabinet fixtures.

Refinish Your Cabinets

If the existing kitchen or bathroom cabinets are in good shape, paint them and install new hardware to remove the cost of installing new cabinets. Additionally, adding new trim to your existing cabinet can help you save money.

Adding under-trim or crown molding trim can transform your box cabinet with the look of custom built-ins. Adding crown trim draws the eye upwards and makes your kitchen look bigger, especially if the cabinets have lots of space at the top.

Moreover, with the new trends of mixing wood colors, it is no longer mandatory to have uniform colors. Essentially, you may even save money by mixing wood trim colors.

Shop Local for Custom Kitchens

Consider all your options if you have to install all-new cabinets. One of the cheapest options is put-together box cabinets. Unfortunately, these might not have long-term durability. Alternatively, you can contact a local woodworker to tear out and install a new kitchen for the same price as higher-end cabinet price quotations. You might get more than you anticipated by asking for local recommendations for local businesses.

Add a Backsplash

It is a very manageable project that makes a big aesthetic impact. You can opt for a beadboard backsplash, one of the easiest, fastest, and most affordable options for your kitchen. Alternatively, you can go for “lick-and-stick” backsplashes that don’t involve lots of cutting.

However, for the most custom look with real tile, you will need a tile cutter and a trowel to get the job done. You can finish it with a pre-mixed grout.

Work With Your Existing Kitchen Layout

If you are contented with your current kitchen layout and simply craving a fresh update, consider working with a local kitchen builder or contractor to retain as much of your existing kitchen layout as possible to save huge.

Moving the existing kitchen layout, for example-moving, the position of an oven-may involve changing plumbing and wires, which may be more expensive.

Convert An Old-Cart or Table Into A Kitchen Island

It is crucial to think and see outside the box instead of installing a new kitchen island or hiring a contractor. Doing so may increase your budget with the requirement of additional codes and permits.

A moveable kitchen island can help you achieve the look you are going for and save you lots of money on construction costs. Adding castors to your existing table or a thrift cart to make it mobile is one way to go about it. A workable kitchen island gives you the appearance and functionality without the effort and accompanying costs.

Choosing Your Kitchen Renovation Team

Kitchen renovation should be a rewarding experience. The 2019 Remodeling Impact Report by the National Association of Remodeling Industry gave kitchen renovation a joy score of 10, with 95% of homeowners having an elevated sense of excitement when at home.

According to Koonz, a large factor of the feelings stems from the remodeling experience. She insists that a professional team is always behind every positive response and feedback.

Liaising with a professional contractor and interior designer plays a part in making your choices easier. Since designers and contractors are already familiar with existing fixtures and materials, they can recommend better options for your budget and renovation project.

A kitchen designer’s fees may seem like a considerable chunk in the budget at the initial stages, and most homeowners tend to avoid it. However, the feel is vital and saves you money in the long run, especially if it is a DIY project. Moreover, a kitchen designer also knows and can recommend the best contractors in your area.

Summary

How much will it cost to remodel a kitchen in 2022?

No two kitchens are the same. Therefore, the renovation costs may vary depending on the size of the room, material qualities, the desired layout, and the intended function. However, expect to pay around $27,000 for small kitchen renovations and $150,000 for larger renovations with luxury fittings and installations.

Fortunately, there are several ways (and more, call Schwalb Builders for more info) you can reduce your kitchen remodeling costs without compromising on quality. For starters, cut out labor costs by taking up some DIY tasks. Additionally, you can try sticking to your existing kitchen layout to avoid major costs that come with changing major features such as plumbing.

Generally, hire a professional contractor and kitchen designer to help you acquire affordable yet quality materials to help keep your budget reasonable.