Home improvement refers to the process of renovating or making additions to an existing home. The goal is to improve livability and increase the home’s value by making it more attractive. Home improvements can be expensive, but they are often worthwhile. However, it is important to know that not all renovations will increase your home’s value. For example, installing a swimming pool in your backyard is unlikely to boost your home’s selling price.
According to the National Association of Realtors (NAR), homeowner home improvement spending reached a three-year high in 2022. There were several reasons behind the increase, including rock-bottom interest rates and an aging population. In fact, homeowners aged 55 and older accounted for half of all remodeling activity.
The term “home improvement” also includes repairing, restoring or modernizing an existing residential building and may include the construction of structures like fences, garden walkways or sheds. It can also encompass landscaping, painting, paving, roofing and insulation installation.
A home improvement project should always have a return on investment (ROI) or payback period in mind. This refers to how much the renovation will add to your home’s value versus how much you paid for it. It is also important to consider whether your renovation will appeal to the broadest range of prospective buyers. Keep in mind that some projects can actually decrease your home’s value, for example if you install a kitchen with a specific style that is not common among your neighborhood.