Home improvement is a broad industry that includes the sales of building materials and appliances, as well as contractors and other workers who help homeowners with renovations or improvements to their homes. It has enjoyed great growth in recent years, especially during the COVID-19 pandemic.
Home improvements are a fact of life for most homeowners, whether they are watching Fixer Upper or This Old House on the television, or taking on those can’t-wait projects such as a leaky roof or worn-out floors. But what are the best home renovations to do, and which ones will actually add value? And how do you avoid those pitfalls of overspending or underestimating the cost of a project?
According to the 2022 American Housing Survey, about 3 in 5 homeowners did at least one home improvement project during the pandemic. The reason was varied, with respondents citing improved livability (34%), pandemic-related social distancing (30%) and wanting a change (26%).
In the survey, 76% of all home improvement projects were paid for with cash from savings, with the remaining projects paid for with other sources such as credit cards, contractor arranged financing and cash-out refinancing. The largest portion of all home improvement spending was on kitchens and bathrooms, followed by decks and patios and finishing a basement.
However, not all home improvements will improve a property’s value or increase usable space, and many may not even be worth the initial investment. To keep from decreasing a property’s resale value, it’s important to select projects that will be attractive to the widest possible range of buyers, and to choose high-quality materials that will last. In the long run, energy-efficient improvements such as new windows and insulation will usually pay for themselves by lowering energy costs.