Home improvement is the process of renovating or making additions to a home. It can be done for a variety of reasons, such as increasing comfort and safety or improving the property’s value. It can also be done for financial reasons, such as reducing energy costs. Home improvements may be performed by a professional contractor or by the homeowner.
Before undertaking any renovation, you should know whether the project is worth it financially. You’ll want to consider the return on investment and whether you can afford to repay any debt incurred. This article provides a guide to help you make smart decisions when remodeling your home, as well as how to avoid common mistakes that can lead to overspending and unnecessary debt.
The COVID-19 pandemic created the perfect storm for a DIY home improvement renaissance: a stay-at-home zeitgeist, a labor shortage that drove up construction costs and a housing market where homes — even those in disrepair — are selling for a mint. And it seems like more homeowners are feeling inspired to improve their living spaces than ever before, according to the latest home improvement data. The National Association of Realtors (NAR) reports that after completing one remodel, 86% of homeowners felt motivated to upgrade other parts of their houses.
A survey by NerdWallet in September 2022 found that 3 in 5 homeowners who took on home improvement projects in the past two years did so because they were spending more time at home because of social distancing and other pandemic-related restrictions. Another 3 in 5 said they took on the projects to increase the livability of their houses.
However, the home improvement industry is expected to slow down in 2024 because of a number of factors, including stalled home sales and mortgage refinancing and rising labor and materials costs. Additionally, homeowners are starting to become more cautious about committing to large-scale DIY projects that require hiring contractors and spending significant money.
If you plan to sell your house soon, it’s important to make sure any upgrades you undertake are in line with the style and cost of other homes in the neighborhood. A hot tub or a fountain in the backyard might look nice, but it won’t likely add much value to your house if the rest of the neighborhood doesn’t have them.
Similarly, a new front door might enhance your home’s curb appeal but probably won’t add much to its value if your neighbors all have plain ones, too. It’s also a good idea to avoid high-end upgrades that are overly personal, since they might not appeal to the majority of prospective buyers.
If you’re ready to take on a home improvement project, you can compare loan offers to find the best deal and get started. It’s a good idea to pre-qualify with multiple lenders before you apply so you can compare estimated rates and terms without affecting your credit score. You can also gather any necessary documents in advance to speed up the application process.