Home Improvement – How Much Do Homeowners Spend on It?
Home improvement refers to the repairing, remodeling and altering of an existing home or building. This includes a wide range of projects, from fixing plumbing leaks to adding an addition on the back of the house to make room for a family room or a master suite. It also can include landscaping, building a deck or patio and other outdoor projects. It is a major part of homeownership, and the amount of money homeowners spend on it is significant.
In the past two years, homeowners have spent an average of $522 billion on home improvements. The projects often come unannounced, in the form of a leaking roof or flooded basement, but when they do arrive, they need to be tackled right away. That’s why many homeowners turn to credit cards and personal loans to finance their home repairs and remodels.
Typically, homeowners seek to improve their homes so that they function better for them and their families. But it’s important to consider resale value, too. If a renovation doesn’t add resale value or make the home more appealing to a wide range of buyers, it may not be worth the expense.
In general, the older a homeowner is, the more likely they are to pursue home improvement projects, according to a recent survey from the Harvard Joint Center for Housing Studies. For example, owners between the ages of 55 and 64 drove half of home improvement spending in 2017. However, that may be due to low inventories of homes for sale, the need to make necessary maintenance repairs or a desire to stay in their current home longer.
It is also important to note that different states have their own rules regarding home improvement. For instance, some states require a permit for all projects, while others do not. Also, some contractors may charge different rates for the same services. As such, it is always wise to compare contractors before hiring one for a particular project.
Finally, the coronavirus pandemic has made some homeowners less willing to allow home improvement professionals in their houses, and a number of projects have been put on hold. As of September, a quarter of homeowners told NerdWallet they would be more cautious about inviting contractors into their homes because of the pandemic.
As a result, some projects have seen lower return on investment than usual, such as sparkling bathroom overhauls and big-ticket kitchen and basement remodels. Those seeking to get the most out of their home improvements may want to focus on smaller projects that will have a wider appeal. For example, installing a new energy-efficient hot water heater or replacing old windows could save homeowners money on utility bills and provide a high ROI when they sell their home. Also, homeowners looking to increase their curb appeal should consider a more neutral color palette like whites and grays that are more likely to please the majority of potential buyers.