While creating a budget before launching a home improvement project may seem like an obvious first step, a new survey says otherwise.

According to a recent homeowner sentiment report from Modernize, a QuinStreet company and leader in the home improvement and services industry, a growing number of homeowners are embarking on new projects without first creating a budget.

Modernize's homeowner sentiment survey is an ongoing, long-term study of how homeowners research and evaluate home improvement projects such as window replacement, roofing, solar power, and heating and air conditioning. The study covers how homeowners budget for their improvement projects, how they find and select their preferred contractor, and how they plan to pay for their projects.

The results—based on survey responses from over 12,300 homeowners—show:

Across all trades, 79 percent of homeowners do not create a budget for their project. This is an increase from 75 percent in 2019 and was highest among those considering a solar panel project, with 89 percent reporting no up-front budget.

Family and friends are less often the primary source of budget assistance (32 percent in 2020 vs. 41 percent in 2019). About 30 percent use online tools and cost calculators.

After price, expertise is the most important factor in selecting a contractor. Twenty-six percent reported expertise as a critical factor in 2020, up from 19 percent in the 2019 survey.

A majority of homeowners (53 percent), across trades, spend 1 - 5 hours researching their project before submitting a lead. Approximately 30 percent of homeowners spent zero hours before requesting that a contractor contact them.

This year, 75 percent of homeowners plan to finance at least part of their project, with 30 percent of those respondents intending to borrow the project's entire cost. This is an increase from 23 percent financing their entire project amount in 2019.

Before setting out on your home improvement project, remember to create a budget first, factoring in a buffer for unexpected costs. Also consider consulting with a local real estate professional to find out how your intended project may increase the value of your home.