Home improvement is the alteration, renovation, repair, or remodeling of a residential or noncommercial building. These projects include installing, repairing, or replacing elements of the structure and property such as driveways, roofs, walkways, fences, lighting, heating and air conditioning systems, electrical work, plumbing, walls, floors, ceilings, windows, doors, and more. Some home improvements may be intended to make the house more energy efficient, while others may enhance its appearance or provide additional living space.
Homeowners can find a lot of satisfaction in taking on home improvement projects, but the return on investment can vary significantly. While some upgrades — like painting rooms or replacing light fixtures — can be very cost-effective, others can be quite costly and may not increase the value of the home at all. In fact, the majority of home improvement projects fail to fully recoup their costs.
But a surge in homeowners upgrading their homes didn’t happen because of the pandemic, according to a recent survey by the National Association of Realtors (NAR). The vast majority of people who upgraded during the pandemic already planned to do so – and were motivated by things like making their homes more comfortable, enhancing livability, or simply wanting a change.
One reason why so many people were willing to spend money on home improvements during the pandemic is that rock-bottom interest rates made these investments seem much more affordable. And though a few people might have been reluctant to hire contractors due to pandemic concerns, most did so and found satisfaction with their finished products.
In the near future, however, NAR predicts that homeowners will begin to re-evaluate their pricier renovation plans. This may be due to the slowing economy and a cooling housing market, but it could also be because households will have more time to devote to renovations and will have more realistic expectations about how much it will cost to finish them.
NerdWallet’s data suggests that nearly all homeowners plan on undertaking some home improvement projects in the next few years. But while most of them are interested in doing small upgrades — such as painting rooms or updating light fixtures — the most common project will be adding an extra bedroom.
While a new primary suite will certainly add to the resale value of your home, it’s important to keep in mind that potential buyers are likely to be looking for a house that is priced similar to those nearby. For this reason, it’s best to limit high-end upgrades that will only appeal to a small portion of the market and instead focus on more popular midrange options.
As you start to think about what your plans might be for the future of your home, be sure to discuss it with a real estate agent. They can help you determine the best ways to improve your home for your specific situation and goals, while ensuring that any changes will be a sound financial move in the long run.