Home improvement is a broad term that includes any renovation, repair or remodeling of a home or apartment. This industry encompasses the sale of building materials, appliances and decorations to homeowners, as well as the construction and installation services offered by professional contractors and tradespeople. Home improvement also refers to the use of DIY (do-it-yourself) projects to improve one’s home. It’s important to note that the return on investment for home improvements varies widely. A kitchen or bathroom remodel, for example, typically adds value to the home but a new patio cover or backyard fence is less likely to increase a property’s value.
Whether you are planning to sell your home in the near future or simply want to make it more comfortable, there is no shortage of ideas for home improvements. However, before you start tearing down walls or buying new furniture, it’s worth taking the time to consider which projects will add the most value to your home. If you’re not careful, you may end up spending more than your home is worth or going into debt to complete the project.
Many homeowners made upgrades to their homes during the Covid pandemic, but the frenzied rush has subsided. In fact, both Lowe’s and Home Depot report a cooling of home improvement sales this year, with shoppers deferring large projects and opting for cheaper do-it-yourself fixes instead.
Consumers still have an appetite for improving their homes but are being more cautious about their budgets. According to market research firm Circana, consumers are opting for smaller home improvement projects that can be completed quickly and cost less money. Homeowners are also deferring the addition of features that are hard to price or require professional installation, such as a heated garage or a swimming pool.
In the past, it was common for home improvement projects to be paid for with a home equity loan or line of credit. But as interest rates have risen, the number of homeowners using these types of loans has decreased. Instead, a typical household will use savings or take on debt to fund home improvement projects. In fact, a recent survey found that 22% of Americans had to cut back on other expenses or tap into savings to pay for home improvement projects, while 14% borrowed from credit cards and 8% took out a home equity loan to fund their projects.
Before tackling any major home improvement projects, it’s a good idea to consult with a real estate expert. They can help you identify which projects will add the most value to your house and ensure that any changes won’t make your home hard to sell. It’s also important to keep in mind that some home improvements may not add value to your house at all, especially if they are overly personalized or go beyond the taste of other buyers. For instance, if you install an expensive fountain in the front yard while all of your neighbors have modest landscaping, it will stand out, and not in a good way.