The Home Improvement Industry

Home improvement

Home improvement is a large industry that encompasses the sale of building materials, appliances, and decor, as well as the contractors, tradespeople, and workers who help to build, install, repair, or improve homes. The market reached record highs during the COVID-19 pandemic, when homeowners spent heavily on projects to make their properties more livable and attractive. However, revenues are expected to start declining in 2024 as the housing market struggles and labor costs rise.

Home improvements can be anything from minor repairs to major renovations and extensions. They are generally defined as anything that changes the structure of a building and is intended to enhance its utility, appearance, or comfort. This includes everything from a fresh coat of paint to adding an extension, and it may include reworking the layout of rooms or building an entirely new space such as a kitchen, bathroom, or bedroom.

A common home improvement project is painting, which can be one of the most cost-effective ways to transform a room. Other popular fixes include installing a new front door, replacing worn flooring, or updating fixtures and lighting. Many of these projects can be completed with minimal disruption to daily routines, but they must be done correctly and to a professional standard if they are to add value.

More significant renovations, such as installing an additional bathroom or bedroom, can be much more expensive. However, these types of projects can also increase the overall value of a property and therefore be considered a good investment.

The most important factor in deciding what type of home improvement to undertake is the homeowner’s personal preference and budget. Some homeowners may prefer a more modern look, while others may be keener on preserving the character of their property. The key is to ensure that any changes made are in line with the homeowner’s desired style and that the work undertaken will not become obsolete or out of date in a short period of time.

Despite the drop in the housing market, home improvements are still an important driver of spending in the economy. In fact, 3 in 5 homeowners (61%) have done some sort of home improvement project since March 1, 2020, according to the NerdWallet survey. Those homeowners spent $6,438, on average, on those projects.

Spending on home improvements varied by homeowners’ ownership status, with those who moved into their properties one to five years ago investing the most in renovations. However, those who have been in their homes six or more years spent less on home improvement projects.

The return on investment (ROI) of home improvements can vary from over 100% to just a few percentage points, but the main reason people invest in them is to enjoy the increased comfort and functionality that the upgrades bring. It is worth remembering, though, that ROI percentages are based on what the projects add to the house value and are not necessarily what a buyer will pay for a property in the current market.