Home improvement, also called home renovation or remodeling, is the process of improving the interior and exterior of a residential structure. It can be done for a number of reasons, including increasing comfort, safety or the beauty of the house; making it more energy efficient; or adding to the home’s value.
The highest-impact upgrades, such as kitchens and bathrooms, typically offer the best return on investment, but it’s important to keep in mind that buyers may not see your upgrades the same way you do. Moreover, over-renovating to the point where your home becomes much more expensive than other homes in your area could scare away potential buyers, Walczak says.
While rock-bottom interest rates made home improvement projects more affordable, the current economy is taking its toll on the industry. Per a recent LIRA report, home improvement spending peaked in 2022 and is expected to decline through 2024.
A variety of factors are influencing the downturn, such as ongoing mortgage refinancing activity, rising labor costs and continuing supply chain problems that have raised material prices. In addition, a decrease in household moves is depressing remodeling activity that usually occurs around the time of a sale.
When it comes to paying for a home improvement project, homeowners have several options available to them, from using savings to borrowing against their equity. In the latter case, it’s critical to weigh all the pros and cons of a particular loan before deciding whether or not it’s a good fit.