Home improvement is a multibillion-dollar industry that encompasses the sale of building materials, appliances, and decor as well as services such as construction, plumbing, painting, cleaning, and maintenance. The industry has experienced robust growth in recent years, especially during the COVID-19 pandemic. In 2023, the JCHS forecasts that home renovation spending will increase to $485 billion. This article explores some of the latest stats and trends in this field, including how to choose a contractor, what projects are most popular, and if your home improvements will add value.
One of the biggest reasons homeowners undertake a home improvement project is to enhance their living experience, but many also hope that their project will add to their property’s resale value. While some home improvement projects will boost your property’s value, it is important to note that the percentage increase in home values varies by location, neighborhood, and time.
If you are considering a major home improvement project, it is essential to take the time to evaluate your options and to consult with professionals to ensure that you are making the best decision for your family’s needs and budget. In addition to cost, there are a variety of other factors that should be taken into account, such as whether the work will meet local codes and regulations. Finally, it is always wise to compare multiple bids from contractors before choosing one to complete the work. Contractors can vary in price, quality of work, and ability to finish jobs on time.
Depending on the scope of your project, you may need to secure financing before beginning work. Fortunately, there are several options for financing home improvement projects. You can apply for a home equity line of credit (HELOC), which is a revolving line of credit that is backed by your home’s equity; you can also obtain a traditional second mortgage, which typically has a fixed rate and is repaid over a set term.
While the majority of homeowners who complete home improvement projects do not go into debt to finance their work, a significant number do. Often, this is due to misestimating the cost of a project or using excessively expensive materials. However, even with a careful planning process and accurate estimates, it is possible to overspend on a home improvement project.
Many people find that they do not have enough savings to pay for all the renovations they want to make. For this reason, many turn to the financing industry to help them afford their projects. Among the most popular methods for financing home improvement projects are personal loans, credit cards, and, most commonly, home equity loans. However, it is crucial to understand the difference between home equity loans and unsecured credit before committing to this type of financing. For example, a home equity loan has an interest rate that is usually higher than unsecured loans and requires a down payment. In addition, a home equity loan can have prepayment penalties and other fees that can significantly reduce your total loan amount.
