Budget? What Budget?

Nearly one-third of homeowners take on a remodeling project without setting a budget, and the same share exceed their established budget (31% each).

That's according to the fifth annual Houzz & Home survey of more than 120,000 respondents in the U.S.

Homeowners who exceed their budgets spend considerably more on their projects ($83,400 average spend) than those who stayed on budget ($52,300). Surprisingly, those who did not set an initial budget spent less, on average ($44,100), than those who stayed on budget.

Renovators of a recently purchased home are significantly less likely to embark on a project without a budget (24%), yet are much more likely to exceed an established budget (40%). The decision to opt for more upscale products and materials was the top budget buster (45%), ahead of products/services being more costly than expected (40%) and the decision to change the project scope/design (33%), further signaling a high level of consumer confidence.

When it comes to financing, the majority of homeowners continue to use personal savings/finances to fund their renovations (82%), followed by credit cards (21%). Millennials are most likely to pay for their renovations with a credit card (32), and Baby Boomers are least likely (17%). While home equity lines of credit are the biggest form of debt financing, fewer than one in ten renovating homeowners leverage this option to fund their projects (8%).

The Houzz & Home Survey was sent to registered users of Houzz and fielded in March-June 2016. The Farnsworth Group, an independent market research firm, conducted the survey.

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