Home improvement is a broad term that can encompass many different types of projects, renovations and remodeling. Generally, a home improvement project is something that makes your house more comfortable or functional in some way. It can be as simple as painting a room, installing new light fixtures or renovating the kitchen. However, home improvements can also be much more extensive and costly projects like adding an addition to your house or even a total home remodel. In the past few years, American homeowners have undertaken a large number of these projects. In fact, they spent a total of more than half a trillion dollars on them in 2021 alone, according to the latest report from the American Housing Survey (AHS).
The reason for this spending spree seems to be that many people are planning to sell their homes in the near future. In this case, it makes sense to make the house more appealing to prospective buyers. However, the majority of those who are considering a home improvement project say they are doing it to make their house more comfortable or just feel satisfied with it. It is worth mentioning, though, that the return on investment from most home improvements is quite low. Only 20% of those who plan to undertake a home improvement project in the near future expect to recoup their costs when they sell the house, according to a recent NerdWallet survey.
Most homeowners pay for the vast majority of their home improvement projects with cash, according to the AHS. However, when projects become more expensive, they are more likely to resort to other financing options. The most common method is to borrow against their equity in the home, using a mortgage refinance or a home equity loan. Alternatively, they may use credit cards or take out an unsecured personal loan.
It is worth mentioning, too, that the most popular home improvement projects are those that can be done easily by the homeowner without professional help. Painting a room, updating light fixtures and replacing old carpet are examples of these kinds of projects. However, homeowners should be careful when hiring a contractor to do any major work on the home. It is recommended to research the company and check for credentials such as licenses and insurance. It is also a good idea to shop around and compare prices.
For those that are unable or unwilling to do their own work, there are a number of aggregators that offer services such as supplying and installing materials and helping with the planning process. These specialized services are typically more expensive than hiring an individual or company to do the work. However, the convenience and reliability that they can provide may be worth the extra cost for some homeowners. This is especially true if they have several different home improvement projects that need to be completed. It is also a good idea to talk to a real estate agent about any planned renovations before getting started, to ensure that they will add value to the home and not detract from its resale potential.