Home improvement is any work done to a house that improves its function, adds livable space, or increases its market value. Home improvement projects can be very costly, so it is important to keep a budget in mind and only complete renovations that will provide a return on investment.
According to the NerdWallet survey, homeowners are thinking about a variety of home improvement projects in the next two years, from painting and replacing light fixtures to expanding or adding on to their houses. Some homeowners are renovating to increase their property value, while others want to make their homes more comfortable for themselves and their families.
The most popular home improvements include:
The home improvement industry exploded during the COVID-19 pandemic, as people upgraded their residences for many reasons. Some cited the pandemic as their motivation to upgrade, but others said they wanted a new kitchen or a better bathroom, or they simply wanted to enjoy their homes more. Homeowners also reported satisfaction with their upgraded homes.
Many of these upgrades were completed during the pandemic, but the trend is continuing even after the pandemic ended. One reason is that people are more interested in reducing their energy costs by installing new windows, heat pumps and insulation. These upgrades can help to save money on utility bills and will make the home more attractive to buyers when it is eventually put on the market.
Another reason for the spike in home improvement spending is that rock-bottom interest rates are making it affordable to borrow funds for remodeling projects. The survey found that 29% of homeowners financed their improvements with debt, including mortgages, credit cards and personal loans. Some homeowners also used the equity they built up in their houses to pay for some of the work.
In addition, a large number of homeowners used savings or cut back on discretionary spending to pay for their projects. The survey found that 20% of homeowners who took on projects during the 2021 period did so by delaying or cutting back on other purchases, and 14% sold items to fund their renovations.
While it is a good idea to choose upgrades that will add value to the home, it is also important to choose upgrades that will appeal to the largest number of potential buyers. This means avoiding any home improvement projects that are too personalized or would be out of the style of the majority of other homes in the neighborhood.
It is also wise to avoid doing any home improvement projects that require an urgent response. These can include fixing a roof leak, repairing a faulty electrical system or addressing serious structural damage caused by a storm or a flood. If an emergency situation arises that cannot be ignored, a short-term loan such as a home improvement loan can be an excellent solution to address the problem and get the household back to normal. This will allow a family to sleep at night knowing they are safe and secure in their home.
