Home improvement can be done for many reasons, but most homeowners say that they are doing it to improve the quality of life. Almost half of all homeowners surveyed by the NerdWallet said that they were doing it to make their home more comfortable. Other common reasons include making it safer or more attractive to potential buyers.
In fact, the Angi survey found that American homeowners spent more than $500 billion on home improvement projects over the past few years. It was the highest amount of spending since the survey started seven years ago. The increase in projects has been led by a spike in the number of consumers who are converting basements into one-bedroom apartments.
However, the Angi survey also reported that a substantial amount of homeowners were borrowing against their equity to finance their projects. About 12% of the homeowners who took on a home improvement project had to exhaust their emergency savings, and another 20% had to use their discretionary spending to pay for it.
There is a lot of competition in the market, with many new players aiming to entice customers. Some of these players are unlicensed and part of the grey market. Others are reputable and accredited. They compete on pricing and differentiation.
One factor that affects home improvement spending is inflation. In the United States, prices for goods have increased significantly over the past several years, which means that home upgrades will be less affordable than in the past. Aside from that, mortgage rates are also rising. This can be a significant hurdle for homeowners who wish to do home improvements.
While the recession may impact spending in the future, a large portion of the population is likely to continue to do home improvement projects. Most of these projects are aimed at increasing the energy efficiency of a home, which can help save money. Another factor is that a homeowner’s personal preferences and lifestyle can often be tailored to their home. These are reasons why home updates can be a worthwhile investment.
Investing in a few upgrades can create more living space and give a home more style. However, it’s important to be mindful of how your home improvements will be resale value. For example, marble flooring might be an impressive upgrade, but a potential buyer might not want to pay for it. Similarly, a backyard paradise might not add much value to your property.
One of the most expensive home improvement projects is installing a security system. Using this type of service can cost an average of $754. Also, adding an additional bedroom to a home will cost an average of $63,000. Adding a bathroom and a kitchen to a home is another popular choice, with an average cost of $33,190.
Whether you are looking to remodel, renovate, or just make a few small updates, the key is to find a contractor you can trust. Look for references, insurance, and a license to ensure you are partnering with a reputable business.