Home Improvement and Its Impact on Home Value

Home improvement is the repair, maintenance, modification, addition, or improvement of a building or structure. It includes such activities as remodeling a kitchen or bathroom, adding an in-ground pool, finishing the basement, and installing new flooring or paint.

Homeowners spent more than a half-trillion dollars on home improvements in the past few years, according to the latest American Housing Survey from the U.S. Census Bureau, but they say inflation and a potential recession will influence their spending moving forward. This will have a direct impact on companies such as Home Depot, which has seen its sales grow steadily over the last few years as homeowners renovate their houses.

While it’s always a good idea to make your house as comfortable and appealing as possible, many of the projects people take on may not actually boost the value of their homes. For example, if you install a huge fountain in your backyard when all of the other homes in the neighborhood have simple gardens, yours is likely to stand out for all the wrong reasons, and might not appeal to buyers.

That’s why it’s important for homeowners to keep in mind their long-term plans when taking on renovation projects, and consider how much return on investment they might expect from the project, particularly if they plan to sell their homes soon. That way, they’ll know whether it’s a sensible use of their money or not. The best approach is to focus on projects that can’t be put off, such as fixing a roof leak or updating an electrical system.