Home improvement is the process of making repairs, additions, and improvements to a home. This includes kitchen renovations, bathroom remodeling, basement finishing, and other home changes. It also encompasses the installation of new fixtures, appliances, and decor. This industry is fueled by the sale of building materials, tools, and equipment as well as by the labor needed to complete the projects.

According to the latest report from the Joint Center for Housing Studies of America (JCHS), home improvement spending hit a record high in 2023, but will start to decline as the economy slows down. This is due to a number of factors, including rising labor costs and continuing problems with the housing market.

Typically, homeowners undertake home improvement projects to improve the comfort and safety of their homes. However, there are other reasons, such as the desire to increase the resale value of their property or simply to keep up with trends in design. Whatever the reason, homeowner investment in home improvement projects has grown since 2010. The most significant driver of this trend is older homeowners, who account for half of all homeowner renovation spending.

The types of home improvements that provide the best return on investment include those that add functional space, such as adding a bedroom or a bathroom. Other projects, such as a new kitchen, may add long-term value to the property, but could lose their appeal in 20 years or so, when styles change again.

While some homeowners are eager to spend money on home improvement, others are hesitant. The coronavirus pandemic has led to concerns about allowing contractors into their homes, with almost half of homeowners saying they would be more cautious than usual in the future when hiring home repair/improvement professionals due to safety concerns.

Interestingly, the categories of home improvement that are surging most in the face of the pandemic are those involving work on the outside of the house. This includes deck construction, which has seen a spike of 275%; landscaping, up 23%; and fence construction, up 144%.

It is important for homeowners to have a budget in mind before beginning any project. This will help them stay on track with their home improvement goals and not overspend. In a NerdWallet survey, most homeowners reported that they stick to their budget when undertaking home repair or improvement projects.

It is also important to understand the laws and regulations governing the practice of home improvement in your area. In some states, like New York, it is a misdemeanor to engage in home improvement without a license. In such cases, you can be subject to criminal and civil penalties. A license is usually required in the name of the person or entity performing the work. A corporation must have a licensed individual designated as an officer or agent to act on its behalf. If you are unsure of the requirements in your state, please contact your local government agency. A good place to start is the Department of Consumer Affairs.