The Real Cost of Home Improvement
Owning a home in the United States is often regarded as the pinnacle of the American Dream. Many Americans spend their lives saving for and then purchasing a home, only to realize they are now obligated to pay a mortgage for 20-30 years or more!
One might have hoped that the American Dream had been fulfilled at this point, but few homeowners will tell you they are 100% satisfied with their purchase. Even fewer will claim such after five or ten years, feeling burdened by their mortgage in a home that no longer suits them. They are left wondering if they misunderstood the American Dream altogether.
This may sound pessimistic, moroes, or melancholy, but it is not inexplicable, nor does it have to be a permanent condition as we will explain shortly.
As time goes on, a family's needs will change.
It may grow, adding new members in the form of children or pets, making what once felt like a mansion feel like a shed, leaving a longing desperation for a finished basement or a bedroom addition.
It may find that the once beautiful backyard that hosted so many barbeques with friends can’t even begin to accommodate a multi-family gathering. Maybe a larger patio or a pool has now found its way into that once humble American Dream.
Additional cars or hobbies may now require a new garage or have rendered the old one obsolete. How many of us would love to set up a workshop or gym in our garage?
Even if none of these circumstances applies, it could simply be that one’s taste has changed.
Where one may have loved their quaint little stoop once upon a time, they may now long for a lavish, covered porch to adorn the front of their home. And they would be especially smart to think in such a way if they were getting ready to sell their home. Curb-appeal has been proven to expedite the sale of a home by 10-15% on average!
Where one’s kitchen may have been superb for frying up steaks or scrambled eggs, years of practice may have led to an expertise in cooking that can now only be practiced in a kitchen with twice the counter-space and a Viking range. Of course a breakfast bar wouldn’t hurt either, since those scrambled eggs have now evolved into delectable omelets.
If you can relate to any of these feelings, trust that you are not alone!
Home improvement is a gargantuan industry in the United States. Projected to gross roughly $324 billion in 2018, it will account for roughly 1.8% of all US economic activity for the year. And with somewhere around 76 million occupied homes in the US, this means that each homeowner will spend on average over $4,000 improving their home in 2018.
Of course, many will spend more than this and many will not spend at all. Of those that will not spend, this is often due to the fact that home improvement can seem like an intimidating financial obligation to many homeowners.
The national average for a mid-range kitchen remodel is around $20,000. Basement remodels can average roughly $70,000. Even something as simple as a patio can run homeowners about $50,000. Unfortunately, to many homeowners, these figures are simply blinding, inhibiting their ability to see the real cost of home improvement. Yet, it is absolutely paramount that one considers the return on investment (ROI) when calculating the real cost of improving their home.
Homes are not like cars that lose half their value the minute you drive them off the lot.
While they do lose value with age and thus are often misconstrued as depreciating assets, they typically do not depreciate fast enough to outpace market fluctuation and economic inflation. More often than not, homes will retain or increase their value if sold at the right time. As such, improvements to homes often see substantial ROI upon sale. In fact, virtually all common home improvements tend to net over 50% ROI!
Rest assured that the new patio you were planning to install to host those larger gatherings won’t even cost you more than half of what you pay to the contractor.
That kitchen upgrade? You’re looking at around 60-80% ROI!
Even that garage gym won’t run you quite what you expected. When it comes time to tap into your equity or sell your home, you’re likely to get about 65% back from what you paid to the contractor.
But you may be interested in more than just a patio, kitchen, or garage. You may also like to see some more precise numbers. Or, you may even want to share this insight with your friends and family to see so you can enjoy gatherings on their new patio just as much as them. So, we’ve done the work and put together a nice little infographic to consolidate this information.
We assembled some valuable data from the National Association of Realtors as well as nationwide polls, statistics, and surveys to illustrate the real cost of home improvement.
At Phoenix Home Services we have committed ourselves to educating our clients. With over 30 years of experience and a wealth of knowledge and intuition in the industry, not only do we have a lot to share, but we also know how to find the raw data that’s most relevant to you as a homeowner.
If you found this data helpful, please be sure to share it with your friends and family! If you have any questions or comments, feel free to contact us using any of the forms on our site. You can even chat with us live between 9am-6pm EST by clicking the floating button at the bottom of every page on our site.
Please be sure to keep us in mind for your next home improvement project!
We offer all of the services mentioned on this page and in the infographic. Of course, these numbers are national averages, so ours may be significantly different. However, we offer free estimates to anyone in Northern Virginia as well as 3D designs of your project before you ever spend a penny.