Home improvement is the repair, restoration or improvement of residential real property. These include the repair of structural elements, plumbing or electrical work and the installation of heating, ventilation and air conditioning systems. Home improvements also include painting, resurfacing or staining surfaces and the refinishing of woodwork.
According to the Joint Center for Housing Studies of America (JCHS), a nonprofit research organization, home improvement spending reached an all-time high during the COVID-19 pandemic. As homeowners were confined to their homes during the pandemic, DIY projects skyrocketed. People took advantage of mandated home time to paint walls, build shelves and create entertainment or work-from-home spaces. The Home Improvement industry is comprised of companies that sell building materials, appliances and decor as well as contractors, tradespeople and other workers who provide services to install or make changes to a residence.
While many homeowners focus on the happiness factor in a newly renovated space, there are some projects that offer a higher return than others in terms of cost recovery at resale and overall homeowner satisfaction. The JCHS reports that some projects such as adding a deck, replacing a roof or upgrading the kitchen are more likely to pay for themselves when it comes to increased resale value and homeowner happiness.
The JCHS estimates that between 2020 and 2021, homeowners spent $363 billion on improvements and renovations to their primary homes. This figure is more than double the average annual growth rate for the period.
However, it is predicted that these home improvement sales will start to slow down in 2023 due to a number of factors. Including a continuing labor shortage and rising home prices, that will have homeowners re-thinking big renovation projects.
Regardless of the reasons for a new home improvement project, it’s important to think through a budget and plan before beginning any construction. Especially when it may require a loan, the mortgage industry experts at Embrace Financial recommends that home owners should get pre-approved for their loan and have a clear idea of the costs associated with their project. This way, they can be matched with a lender that will work for their unique financial situation and help them stay within budget.
Another key factor is making sure that the home improvement project you are undertaking is done by a qualified contractor. Getting a referral from a trusted friend or family member is always a good place to start, but be sure to check references, licensing and insurance credentials before hiring someone to complete the job. Embrace recommends that you avoid ‘grey market’ contractors and instead look for those who are members of a professional association, have a license to perform the work they do and have proof of liability insurance.
Finally, when it comes to your personal enjoyment, it’s impossible to put a price on happiness. The happiest homeowners are those who feel like they have a home that meets their needs. While a nice renovation can boost your happiness, it’s essential to remember that the true joy in owning a home comes from being there and living life to its fullest.