Envisioning completing home projects may not always mean a happy family all pitching in to help re-do a kitchen.
But when most people do plan for a home project, they often overlook the true costs of home projects by underestimating how much they will actually cost. A recent Discover Personal Loans found that the average consumer underestimated the cost of the renovation projects in the survey by around 46%. The most costly underestimated home project is a kitchen remodel. And that was by nearly 50%.
An average kitchen remodel, according to HomeAdvisor, costs $19,920; however, homeowners estimated the project would cost only around $10,338. Another big project that homeowners consistently underestimated is the cost of is a bathroom remodel, which people guessed would cost around $6,371, when, in reality, a bathroom remodel costs $9,274 on average, or a 31% increase over the estimates. Other home improvement projects that homeowners greatly underestimated included deck construction, which people underestimated by $2,420, or 35% of the average $6,919 cost. Cabinet refacing had the highest percentage of cost discrepancy, with consumers estimating the project would cost $1,766, but actually costing $6,692, or a 74% underestimation. Air conditioning installation was another unplanned costly project, costing people $5,233, when they had budgeted $3,047.
What costs are people not anticipating? The survey found that labor can add much more to the total bill than people anticipate. Another issue that people run into is poor planning. Most homeowners reported they don’t set aside a monthly budget for home improvement repairs. In the survey, only 37% adding the category to their monthly budget, meaning when projects come up that are necessary, many homeowners are ill-prepared to deal with the costs.