Home improvement is the process of renovating or improving a dwelling. It encompasses a variety of projects, from changing the exterior of the house to redoing the kitchen and adding on a room. The home improvement industry includes companies that manufacture and sell building materials, appliances and decor as well as those who provide construction or remodeling services.
Homeowners have been investing in home improvements in recent years, spurred by elevated interest rates and stubbornly high inflation. However, Harvard University’s Joint Center for Housing Studies of America (JCHS) predicts that the home renovation boom will cool down this year.
A number of factors could contribute to a drop in home improvement spending, including sluggish job growth and a decline in home sales, the biggest driver of remodelling activity. JCHS expects spending on home renovations to decrease to $449 billion this year, which is about 7% less than in 2024.
The type of projects homeowners undertake depends on their needs and preferences. However, many projects have a positive impact on resale value. The key is to ensure that the improvements are a good fit for the property and the market. For example, while a home recording studio may appeal to a creative individual, a potential buyer with young children might not see the value.
When hiring contractors for home improvements, it is a good idea to compare quotes and look at previous work samples. Also, check that the contractor has a license and insurance. Additionally, consumers should establish a payment schedule and insist that the contract contains as much detail about the project as possible, including types of materials and brands to be used.