Home Renovation Costs in 2022: What to Expect & When to Renovate

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Looking to improve your home? It could pay to wait until next year for one big reason.

Just as it's become more expensive than ever to buy a home, so too has it become more expensive to improve one. There's a major shortage of common building materials, and that shortage has led to an uptick in pricing. Things are so bad that even paint costs are on the rise.

You may want to put off your next home improvement project until 2022. Doing so could end up saving you a bunch of money.

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When it pays to wait on renovations

If you're renovating to sell your home and you want to do that quickly, delaying your home improvements may not be possible. But if you're renovating for your own enjoyment and want to keep costs down, pushing your project off for a few months could work to your benefit.

Right now, many global and domestic supply chains are bottlenecked, due to weather events and pandemic-related shutdowns. Because of that, the cost of materials and other home improvement items has gone up.

Once supply chains iron out their kinks and catch up to consumer demand, the price of building materials should come down. But it'll probably be a number of months until that happens, so waiting until next year to improve your home could be smart.

How to finance renovations

There's a good chance home renovations will become more affordable in the coming year. But that may not mean you can pay for a big home improvement project outright.

If you don't have enough in savings to cover your costs in full, there are different options to look at. First, if you have equity in your home, borrowing against it may be an option. You can do so via a home equity loan or HELOC (home equity line of credit).

These days, home values are up on a national level, so many property owners are sitting on more home equity than they've had. Now could be a good time to tap that equity and finance your renovations.

Another option for paying for improvements is a renovation loan -- a personal loan earmarked for household projects. Like home equity loans and HELOCs, personal loans often come with competitive interest rates. The main difference is that your credit score is a bigger factor in qualifying for a renovation or personal loan than with a home equity loan or HELOC. That's because personal loans aren't secured by a specific asset, whereas home equity loans and HELOCs are secured by your home itself.

No matter how you finance your upcoming renovation, it pays to consider postponing if you have that option. In time, supply chain issues should get resolved, making it less expensive to transform your home and make the most of your space.

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