The Hanover Insurance Group, Inc. released its 2023 Home Buying and Renovation Report, which provides insights into recent home buying trends and plans for renovations in the new year. The Hanover commissioned The Harris Poll to conduct the research, which found that higher home prices and interest rates are slowing home sales and home renovations are rising.
Notable findings uncovered in the research include:
Higher home and interest costs are slowing home purchases – higher home prices and interest rates impacted 69% of respondents looking to purchase a home in 2022. Twenty-eight percent of the respondents looking to buy a home in 2022 decided to stay in their current living situation; this could impact agents who leverage home moving events as a source of lead business generation. Of those who planned to purchase a home in 2022, only 9% of respondents with incomes over $100K opted to rent instead, compared to 21% with incomes under $100K.
Homeowners are staying put, and planning renovations – 61% of U.S. homeowners are planning renovations to their homes in 2023, with one in four (25%) planning significant renovations. 41% of U.S. homeowners planning renovations expect to spend over $50K, and more than half of those respondents have a household income over $100K. Millennials were impacted most by the housing market and are more likely to make renovations over the next 12 months.
One-third of consumers recognize they need to inform their insurance company about a renovation. One-third of U.S. homeowners planning significant renovations in the next year (34%) do not intend to or do not know they must tell their insurance company/agent. This is an 8% increase from last year, highlighting an opportunity for independent agents to proactively reach out to clients to educate them on the importance of updated coverage in case of a claim.
“With homeowners staying in their homes longer due to real estate market conditions, we are seeing more renovations, which increase home values and serve as conversation starters for insurance agents and customers,” said Richard W. Lavey, president of Hanover Agency Markets at The Hanover. “These trends should prompt agents to talk with their customers to ensure their homeowners’ policies reflect the true value of their home after a renovation and that their policies protect the investments they have made to their home. These conversations can help create a strong customer experience that reminds customers of the value their agent provides.”