What Home Improvements Add the Most Value To Your Home?
7.27.2023 | Category: Article
Homeowners in the United States have increasingly undertaken remodeling projects to enhance their living spaces. The 2022 Remodeling Impact Report, a collaborative study by the National Association of Realtors® (NAR) and the National Association of the Remodeling Industry (NARI), provides valuable insights into the motivations behind these renovations and the impact they have on the value of homes.
Two key projects made the list that didn’t make the cut in 2019: refinishing or replacing flooring and adding a home office. However, kitchen upgrades held strong placing third on the list.
Regardless of the shift in preference, the report notes that although 83% of consumers stated they would have remodeled regardless of the pandemic, 86% reported that remodeling one area of their home then inspired them to remodel other areas of the house.
From closet renovations to full interior paint jobs, discover which home improvement projects offer the highest returns, both in terms of personal satisfaction and increased home value.
Projects That Bring Joy and Maximize Value
The report confirms what many homeowners already know; that homeownership changes during the pandemic led to a greater demand for contracting remodeling work. As families spent more time at home, the need for functional and versatile living spaces increased. This shift has prompted homeowners to reconfigure their homes and maximize space.
The study also assessed homeowners' satisfaction with various remodeling projects, measuring their "Joy Score" based on happiness and satisfaction levels. Several projects received high Joy Scores, indicating increased enjoyment and fulfillment.
Refinishing or Replacing Flooring: Refinishing hardwood floors received a perfect Joy Score of 10. Homeowners expressed happiness and satisfaction with this upgrade, with 64% reporting an increased sense of enjoyment and a major sense of accomplishment.
In addition, Refinishing hardwood floors demonstrated the highest percentage cost recovery at 147%. It significantly enhances the aesthetic appeal of a home and contributes to its overall value. Installing new wood flooring recovers an estimated 118% of the project costs. It offers a fresh and modern look that appeals to potential buyers.
Adding a Home Office: Creating a new home office also earned a perfect Joy Score. Ninety-one percent of homeowners reported a greater desire to be at home with the addition of an office, and 73% experienced an increased sense of enjoyment when at home.
There’s no question that the increase in remote and hybrid work has influenced the trend. Homeowners that added onto their property to make their home office a reality saw their existing square footage increase. While homeowners that created a home office out of their existing square footage may have benefited from being able to list an additional bedroom as part of their home’s features.
Kitchen Upgrades: Kitchen remodeling projects remain popular among homeowners, receiving a Joy Score of 9.8. The top motivations for kitchen overhauls were to upgrade worn-out surfaces and improve livability.
Based on the cost estimate provided by NARI remodelers, the average cost of a kitchen remodel is approximately $45,000. Realtors® estimates that homeowners can expect to recover around $30,000 of that amount through the increased value of their home, resulting in a recovery rate of 67%.
Projects that Maximize Value
Home renovations not only enhance homeowners' enjoyment but can also increase the value of their properties. The report assessed the cost recovery for various remodeling projects to determine their impact on resale value.
Insulation Upgrades: Upgrading insulation recovers 100% of the project costs. It improves energy efficiency and reduces utility bills, making the home more attractive to environmentally conscious buyers. With air quality and cleanliness still at the top of mind for home shoppers, insulation also brings peace of mind to prospective buyers.
Angie’s List reports that a new HVAC system costs around $7,500, with costs increasing depending on the size of the home. However, an air purification system can also be a cost-efficient way to improve air quality with systems starting as little as $100.
New Roofing and Garage Door: Both new roofing and a new garage door also recover 100% of their project costs. The average cost of a garage door replacement ranges from $1,800 to $5,400, depending on how many doors the garage features. Comparatively, a new roof can start at about $6,525 for a 1,500-square-foot home according to Architectural Digest. These exterior upgrades enhance curb appeal and a sense of security for potential homebuyers.
Projects That Maintain Popularity
The 2019 Remodeling Impact Report, examined 20 projects by surveying Realtors® consumers who took on home renovation projects and members of the National Association of the Remodeling Industry. Many of these projects remain popular choices for homeowners looking to spruce up their homes.
Revamping home closets proved to be an incredibly satisfying project, earning a perfect Joy Score of 10. The disappointment and inconvenience of an unorganized closet are daily frustrations for homeowners. Upon completion of a closet renovation, the sense of accomplishment is immediate.
Surveyed individuals expressed a significant sense of achievement, with 68% reporting a major feeling of accomplishment when thinking about the finished project. Moreover, 72% stated that they now have a greater desire to spend time at home since the renovation.
When it comes to closet redesign, 56% of respondents highlighted enhanced functionality and livability as the most important result. Another 54% cited the need to improve organization and storage as the primary motivation for undertaking the project. Additionally, 15% acknowledged that it was simply time for a change.
Full Interior Paint Job
Undertaking a complete interior paint job throughout the home received an impressive Joy Score of 9.8. The transformative effect of fresh paint in every room of a house cannot be understated, which explains why respondents considered this task highly significant.
A vast majority of 88% expressed a heightened desire to be at home after their house was freshly painted. Furthermore, 86% felt a major sense of accomplishment when reflecting on the completed project.
New Fiberglass Front Door
Installing a new fiberglass front door is regarded as a top-rated exterior project, earning a Joy Score of 9.7. Upon completion, 79% of homeowners reported an increased desire to spend time at home. Additionally, 67% experienced a greater sense of enjoyment when inside their home, while 69% felt a major sense of accomplishment when reminiscing about the project's completion.
New Vinyl Windows
Replacing old windows with new vinyl ones also received a remarkable Joy Score of 9.6. Among respondents, 42% considered improved functionality and livability as the most important outcome. As for the top reasons for undertaking the project, 47% aimed to enhance their home's energy efficiency, while 23% sought to upgrade worn-out surfaces, finishes, and materials.
By focusing on closet renovations, full interior paint jobs, fiberglass front doors, and vinyl window replacements, homeowners can not only derive immense joy from these projects but also enhance the overall value and livability of their homes.
Undertaking home improvement projects can bring immense joy, satisfaction, and value to your home. Whether it's renovating closets, painting interiors, or upgrading doors and windows, these transformations can truly enhance your living space.
If you're considering financing these projects, it's important to explore your options. Mutual of Omaha Mortgage offers reliable and trusted solutions, such as Home Equity Lines of Credit, Home Equity Loans, and Cash-Out Refinancing.
With their friendly and knowledgeable team, they can guide you through the process and help you make informed decisions about your financing needs. Don't let financial constraints hold you back from turning your dream home into a reality. Take the step today and reach out to Mutual of Omaha Mortgage for a personalized and educational consultation. Your dream home awaits!