Probability of a Home Renovation Going Over Budget

Multiple surveys consistently find that about 56-63% of homeowners who undertake home renovation projects end up spending more than originally planned. The average budget overrun is about 20%, though major renovations (kitchens, bathrooms, additions) tend to have even higher overruns.

The most common causes of budget overruns include unexpected structural or plumbing issues discovered during work, scope creep (adding features or upgrades during the project), underestimating material costs, contractor change orders, permit and code compliance issues, and delays that increase labor costs. Kitchen renovations are the most likely to go over budget, followed by bathroom remodels and room additions.

To minimize budget overruns, experts recommend adding a 15-20% contingency buffer to your budget, getting multiple detailed bids, putting everything in writing in the contract, avoiding changes during construction, completing thorough inspections before starting work, and being present during demolition when hidden problems are most likely to be discovered. Choosing a licensed and insured contractor with good references is also essential.