It’s easy to suffer remodeling regret as a homeowner nowadays. For proof, consider that, according to recent data from Clever Real Estate, 78% of homeowners have gone over budget, with 44% surpassing it by $5,000 or more and 35% by at least $10,000. Additionally, 32% have paused a renovation midway through the project due to unforeseen costs.
So what’s behind this trend, and why are more Americans feeling renovation remorse?
“Most people underestimate what things really cost. Or, they run into hidden issues behind the walls or decide to upgrade things in the middle of the project,” explains Lucas Martelli with Infinity Builders, a remodeling company in Phoenix. “A lot of homeowners also skip budgeting for permits, design help, or living expenses while the remodel is going on.”
Underestimating soft costs and contingencies is the most common financial mistake observed by Jennifer Rogers, an interior designer with BKC Kitchen and Bath.
“Many budget only for materials and labor but forget to factor in design fees, unexpected structural issues, or timeline extensions. Because surprises are so common, I typically tell my clients to set aside at least 15% to 20% of their overall budget for the unexpected,” she says.
Another mistake is over-customizing in a way that doesn’t reflect your home’s long-term value.
“Investing heavily in ultra-niche amenities – like wine cellars with digital integration or custom vanities in every bathroom – could result in low return on investment,” continues Rogers.
A further problem is what Andriy Boyko of A.O. Handy Inc. refers to as “scope creep.”
“You start small – like redoing a bathroom, but then you think, ‘Well, maybe I should replace the floors, too, and those old light fixtures.’ Before long, you’ve added thousands in costs to your job,” he says.
Personal finance expert Andrew Lokenauth says he has observed that roughly 80% of his clients go over budget on renovations, with most homeowners underestimating expenses by up to 40%. According to a recent survey of his clients, nearly 65% spend at least $10,000 more than planned.