The best home improvement projects for the resale value of homes

Homeowners looking for ways to increase the value of their home do not have to look beyond the floor under their feet.

Finishing a home hardwood floor will bring the highest return on investment among homeowners’ most common renovation projects since the pandemic began, according to the National Realtors Association 2022 Remodeling Impact Report.

Homeowners spent an average of $ 3,400 to finish their floors, and the project added an estimated resale value of $ 5,000 to the home, resulting in an impressive 147% return on investment.

Homeowners who decided to install a new floor also saw a very high return on investment, spending about $ 5,500 on new hardwood floors, but received an estimated resale value of $ 6,500 or an ROI of 118%. Upgrading the insulation of a home was the only other project where homeowners recovered at least 100% of the installation cost at resale value.

The best home improvement projects for return on investment

The following household projects were at the top of the list for the highest cost recovery:

  1. Hardwood flooring: 147% investment return
  2. New wooden floor: 118%
  3. Insulation upgrade: 100%
  4. Basement conversion into living room: 86%
  5. Wardrobe renovation: 83%
  6. Conversion of attic into living room: 75%
  7. Complete kitchen renovation: 75%
  8. Bathroom renovation: 71%
  9. Kitchen upgrade: 67%
  10. New bathroom addition: 63%
  11. New addition to master bedroom: 56%

Why is flooring such a good investment?

“For homeowners who want to sell, it’s hard to deny the beauty of freshly finished floors in video and home listings,” said Jessica Lautz, NAR’s director of research. “For homeowners who plan to stay home, it may feel healthier during a pandemic.”

The projects that were traditionally considered the biggest gains when it came time to sell your home, such as a complete kitchen renovation and bathroom renovations, had an estimated resale value of 75% and 71% respectively – no bad return on investment (ROI).

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Home improvement during the pandemic

Housing improvement projects saw a big boost coinciding with the pandemic. It is estimated that $ 420 billion was spent on home remodeling projects in 2020 alone, as lockdowns and social distance reduced restaurant outings and holidays were put on hold. The money saved was used properly to make our inner life more comfortable and useful, Lautz notes, with renovations that added or upgraded home office space and places to practice or attend a virtual school.

“Homeowners have embraced small changes to make their space shine, such as painting and finishing solid wood floors, but have expanded into attics and basements to use every possible square inch,” Lautz said.

While most homeowners surveyed at the NAR report planned to make home improvements independent of the pandemic, 60% said they increased the scope of the renovation because of it. Another 86% said their initial renovation led to additional home improvement projects.

Lautz suspects homeowners will start more home renovations this year. Recent home buyers will want to tailor their living space to their needs, and other homeowners can take on cost-effective home remodeling projects to help them earn the top dollar when putting their home up for sale in today’s hot market.

“For homeowners planning to sell, looking at return on investment can be vital to understanding what to face and perhaps what to leave for the new buyer to take on and adjust,” Lautz said.

Home renovations that bring the greatest happiness

In addition to examining the financial benefits of a renovation, the NAR study defined a “joy score” designed to measure the happiness of homeowners coming from each project, with a score of 10 bringing the greatest joy.

Not surprisingly, there were far more projects that offered a high degree of joy to the homeowner than there were projects that recovered more than 100% of their estimated cost.

Both the finishing and the installation of wooden floors scored 10 on the joy scale. A full 100% of homeowners say they have a greater desire to stay home since they built their floors, while 90% of homeowners feel the same way after installing new floors.

The inclusion of new floors at the top of the list of joy was the painting of the interior of the house, the addition of a new home office and the renovation of a closet.