Home improvement spending has surged in the U.S. by more than 50 percent since 2010. After falling precipitously during the recession, spending has increased again. The increase in home improvements is largely being driven by older homeowners who are more financially secure. In fact, over half of all home improvement spending is made by homeowners 55 years or older, according to the Harvard Joint Center for Housing Studies. The researchers attribute the surge to a shortage of new construction, coupled with an aging housing stock.
Home improvement projects can include anything from painting the walls or adding new furniture to your home. Buying new furniture for your living room would increase the aesthetic value of the room. While furniture itself isn’t considered a home improvement project, rearranging or replacing it would improve the overall appearance of the room. It’s best to check with your tax professional about the exact scope of home improvements to determine whether or not they qualify for a deduction.
Home improvement spending increased last year, but the industry is easing off its highs. Rising mortgage rates and inflation are taking their toll. In addition, homeowners tend to upgrade their home furnishings after they remodel. According to the Harvard Joint Center for Housing Studies, home improvement spending will hit a high this year, and then decelerate to a sustainable growth rate.