High U.S. housing costs are leading homeowners to adjust what they shell out for remodeling projects.
Design website Houzz surveyed 22,000 homeowners who underwent a residential construction project in 2024 and found the median spend on some kitchen and bath projects had declined compared to the year prior.
The median cost of a kitchen remodel decreased to $22,000 last year from $24,000, according to the survey. Bathroom remodel spending saw a similar decrease, dropping from $15,000 to $13,000.
“The softening in renovation spend reflects the impact of elevated borrowing costs and the rising prices for everyday goods and services, which limit how much homeowners can allocate toward home improvements,” Marine Sargsyan, Houzz staff economist, said in a statement.
The survey results were gathered prior to the U.S. tariffs going into effect that potentially raise prices on lumber, drywall, appliances and plumbing fixtures from countries such as Canada, Mexico and China.
Still, the drop signals a shift from high remodeling costs during the pandemic. Bruce Case, president and CEO of Case Architects & Remodelers in Bethesda, Maryland, estimated an increase in costs of about 40% in 2020 when demand skyrocketed and supply chains were disrupted. That demand continued, rising 42% over the past two years, according to an April survey from the National Association of Realtors and National Association of the Remodeling Industry.
“We saw a big jump in pricing during COVID with the sort of manic level demand, and that big increase, some of it was materials, but it was much more labor,” Case said in an interview. “Since then, yes, we continue to see an increase, but it's the typical increases, the 3% to 4%, maybe 3% to 5% a year, tracking relatively with inflation.”
But Case acknowledged a future scenario where costs can come down. While he sees material prices increasing, he suspects there could be a balance and trade-off with a drop in demand for labor, pushing skilled trades such as electricians, plumbers, drywallers and carpenters to lower prices.
The survey suggests demand for remodels overall remains strong, though homeowners may be spending less on average and opting to scale down their projects.
“Notable growth in spend on smaller spaces signals that even amid economic pressures, homeowners are prioritizing meaningful improvements no matter the size of the home,” Sargsyan said.
A remodeling activity gauge published by the Joint Center for Housing Studies at Harvard University found remodeling spending dropped 1.5% annually in 2024 but will modestly increase 2.5% this year.
Kitchens and bathroom costs
For homeowners looking to conduct major kitchen remodels with new appliances and cabinetry, the Houzz survey said the cost could be between $32,000 and $55,000. High-end luxury kitchen projects reach heights of $90,000 to $150,000.
Many factors are at play in determining remodeling expenses, especially if hiring a general contractor for managing the project, materials and subcontractors, such as a tile setter, who perform skilled trade work. At Case’s company, materials could cost $35,000, while physical labor costs exceed $50,000 for a high-end kitchen project with a total price tag of $116,000.
The survey found 90% of homeowners worked with a professional, whether a designer, skilled trade or general contractor.
Kitchens typically receive the most attention when remodeling but bathrooms grabbed the focus of more homeowners last year, according to Houzz. Survey respondents said they underwent bathroom remodels just as often as kitchen remodels.
“People want a spa-like retreat in their primary bathroom,” said Case, who’s seen the same trend at his company. “The kitchen can be a spotlight but also a little more utilitarian. I think the number of huge cooks in our country is probably on the decline a little bit.”
Homeowners put more money into bathroom remodels last year, too. High-end major primary bathroom remodels (replacing the vanity and toilet) increased to between $45,000 and $70,000, the survey said, up from $40,000 and $60,000.
Other projects
Homeowners remodel more than just kitchens and bathrooms. Last year, according to Houzz, homeowners said they spent $4,000 on a living room remodel, a 20% cost decrease compared to 2023.
Other interior rooms such as the primary bedroom, dining room and home office were reportedly cheaper last year at $2,750, $2,100, and $1,000, respectively
New roofs, a big demand for homebuyers, were installed by a quarter of the survey respondents at an 8% price increase. The median cost of a new roof last year was $13,000.