Home improvement (also known as home renovation, remodeling or renovating) is the process of changing the look and feel of a residence. The changes can include upgrading a house interior, including the kitchen, bathroom or bedroom areas, or making additions to a house exterior. Home improvements are often aimed at increasing the value of a property.
The COVID-19 pandemic caused a spike in home improvement projects, and companies like Home Depot benefited from Americans’ love of improving their homes. However, that enthusiasm may be waning as the end of the pandemic approaches and economic uncertainty takes hold. Those factors could impact the amount of money homeowners spend on their houses in the future, as well as how much return they get when they sell them.
Whether or not the housing market recovers, homeowners will likely continue to upgrade their living spaces. Despite the pandemic, 83% of survey respondents already planned to renovate before it started, according to the 2022 Remodeling Impact Report from NAR. Among the most popular projects are adding living space to their house by installing new rooms, such as a sunroom or an additional bedroom, and renovating existing rooms, such as a kitchen or bathroom.
While many homeowners are excited to start their next project, they need to consider their financial situation before committing to any major expenditures. “Before beginning a home improvement project, think about how long you plan to stay in your house and if the projects will increase the likelihood of selling it at some point,” Bera Daigle, a certified financial planner with CNBC’s Wealth Advisor team, says.