Home improvement is a broad term for projects that can be as simple as painting your bedroom or as complex as installing new flooring or a kitchen remodel. Some projects can improve your home’s functionality and help it sell, while others may be expensive but don’t increase resale value. It’s important to weigh your needs and goals with the costs of each project before committing.
In 2022, homeowner spending on home improvements climbed to an all-time high of nearly $18,000 per household. According to Houzz and the Joint Center for Housing Studies of Harvard University, this increase was driven by higher home prices that increased the amount of equity available to borrow against, as well as the aging of baby boomers who are financially equipped to pay for renovations and other homeownership costs.
But spending on home improvements has since cooled off, and homeowners are deferring some of their more ambitious renovation plans in favor of simpler upgrades. While it’s still too early to tell how the slowdown will affect sales and mortgage refinancing, some experts expect that home improvements will hit their peak in 2022 and start decreasing in 2024.
There are some improvements that almost always increase resale value, such as updated kitchens and bathrooms. Adding square footage with a finished basement or deck also increases resale value, as do energy-efficient additions like new windows and insulation. But it’s not always wise to spend money on upgrades that are too personalized or go beyond the taste of a typical buyer, which can turn off potential buyers.
For example, upgrading your bathroom with marble tile and fixtures may make it more appealing to you but won’t appeal to a wide range of buyers. Similarly, converting your garage to an additional living space might be appealing to you but not to other homeowners in your neighborhood. Instead, focus on maximizing your home’s function and updating features that are most in line with other homes in your neighborhood.
If you’re considering any major upgrades to your home, be sure to consult a Realtor who can guide you to upgrades that will appeal to a wide range of buyers and maximize resale value. A real estate agent can also help you determine if it’s more cost-effective to do a larger-scale renovation or to tackle several smaller projects to update your entire home.
Even if you’re not planning to sell anytime soon, it’s still a good idea to perform some routine maintenance on your home to prevent problems that could cost you big down the road. Replacing worn doorknobs, cleaning out gutters and repairing sidewalk cracks are inexpensive, easy fixes that won’t break the bank but will help your home look its best.