Where to Spend Most of Your Home Renovation Budget

Last Updated on December 5, 2024 by Tanya Janse van Rensburg

Home renovation spending in the United States reached an impressive $463 billion in the first quarter of 2024. 

Kitchens and bathrooms dominate the renovation scene, commanding the highest attention—and likely your money. 

Knowing where to allocate your budget can save time and prevent wasteful spending. 

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Kitchens and Bathrooms: The Budget Heavyweights

A kitchen upgrade is the most common choice, making up 29 percent of all home renovations. 

These projects are not cheap. The median spend on kitchen remodels hit $24,000 this year, a 20 percent jump from 2022. 

Bathrooms are closely followed, with guest and primary bathroom renovations accounting for 27 percent and 25 percent, respectively. 

Bathroom renovations are still pricey, with median spending rising 11 percent to $15,000.  

The generational breakdown shows some sharp contrasts. Gen Xers are outspending Millennials by a wide margin. 

A typical kitchen renovation costs $25,000 for Gen X homeowners, while Millennials cap their spending at $15,000. 

Bathroom spending reveals similar patterns, with Gen Xers and Baby Boomers committing nearly $15,000 compared to younger homeowners who invest far less.  

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Prioritizing Key Spaces

Focusing on areas where people spend the most time can yield better renovation results. 

Kitchens, bathrooms, and living rooms top the list for updates, with kitchens accounting for nearly 29 percent of renovations and bathrooms following closely behind. 

These spaces elevate daily living and can also influence the long-term value of your property. 

For example, potential buyers may consider kitchen upgrades when assessing what is my home worth, placing added importance on modern finishes and functionality.  

Even exterior enhancements, such as lighting or outdoor upgrades, can make a noticeable impression. 

Deck additions or improved curb appeal frequently draw attention, shaping perceptions and practical usability. 

While not as personal as indoor remodels, these outdoor projects still reflect broader renovation trends relating to how properties are appraised or evaluated locally.  

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What About Exterior Projects?

Outdoor projects like roofing, decks, and exterior lighting are increasing visibility. Roofing upgrades land with a median cost of $12,000. 

One in five homeowners updated outdoor lighting this year, enhancing safety and aesthetics. 

Meanwhile, exterior security projects grew marginally, with 18 percent of homeowners adding or upgrading features like cameras and motion detectors, a 2 percent rise compared to last year.  

In areas like British Columbia, these projects cost even more. Canadian residents have seen renovation prices spike. 

Western Canada led the charge with a 5.8 percent increase in costs, followed by a 3.8 percent jump in Ontario, primarily tied to rising costs in Toronto. 

Labor shortages and an increase in construction wages further inflate these estimates. 

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How Much Do Homeowners Spend?

Spending habits differ by location and income. The median planned budget for most U.S. households remains around $15,000, unchanged from 2023. 

However, higher-income households still drive luxury upgrades, though their average renovation budget dropped to $80,000, a $5,000 decline from the prior year.  

Some regions of the United States prioritize renovations more than others. Homeowners in the Northeast are leading renovation plans, with 47 percent of residents considering updates. 

The Midwest follows closely behind at 44 percent. Costs add up quickly. 

A full kitchen remodel costs from $12,000 at the bare end to $60,500 for higher-end updates. Major bathroom remodels can cost upward of $24,000.  

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Conclusion

The smartest play for renovation dollars is kitchens, bathrooms, and targeted outdoor projects. 

Given their high impact on daily life and resale value, Kitchens are the clear investment winner. 

Bathrooms, while slightly less expensive, remain key. Outdoor upgrades like lighting and security are cost-effective but offer modest returns. 

Knowing how much and where you plan to spend is half the battle. 

The rest comes down to sticking to it.

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