Home Improvement – Is It Time to Renovate Your Home?
Home improvement, also known as home renovation or remodeling, is the process of improving the interior or exterior of a house. These projects can include renovation of existing rooms (such as kitchens and bathrooms), addition of new rooms, or the complete overhaul of the entire home. Home improvements are often made to increase a home’s value, improve comfort and aesthetic appeal, or make a property more functional.
While homeowners have been in a fervor to upgrade their homes during the COVID-19 pandemic, recent reports indicate that this remodeling boom has peaked and may be waning. The nation’s largest home improvement retailers, Lowe’s and Home Depot, recently announced that household spending on these upgrades has hit a ceiling and is beginning to decline.
Despite this, nearly all homeowners are considering undertaking a home improvement project within the next two years. When asked why they’re planning such projects, most homeowners cite increased satisfaction with their homes (69%), adding functionality (52%), or upgrading worn-out surfaces and finishes (33%).
For those who are planning to renovate their homes, it’s important to consider how the work will affect their long-term investment. If homeowners plan to sell their homes in the future, it’s a good idea to keep their home improvement investments consistent with what buyers are looking for in the neighborhood. For example, it wouldn’t be wise to install a swimming pool when most buyers are interested in homes with pools that are in-ground and safe for children.
According to the latest release of the American Housing Survey, which polls homeowner’s on a wide range of topics related to their homes, just over half of all home improvement projects that were completed between 2018 and 2022 had positive impacts on a home’s resale value. This figure is much lower than the 52% who said this about their projects when we last asked this question in 2020.
The reason for this discrepancy may be a result of how the AHS asks homeowners to self-report their home improvement expenses. This year’s report asks homeowners to “indicate the dollar amount spent on home improvements or repairs during the past two years,” but does not break down expenditures by type, scope, or quality of work.
It’s also worth noting that the AHS only covers owner-occupied homes, and does not include rental properties or multifamily dwellings. It’s therefore not a comprehensive measure of all home improvement projects undertaken in the United States. To get a more complete picture of the current state of the home improvement industry, it’s best to turn to expert sources such as real estate websites and local Realtors who can provide insight on what improvements add value to a house in the local market. These resources can also help you decide whether or not to hire a professional contractor and how much to budget for your upcoming home renovations. Regardless of what you’re doing, be sure to communicate with your contractors and suppliers regularly, and always sign a contract that includes a payment schedule and as many specifics about the work as possible, including types or brands of materials.