Refinishing hardwood floors is the remodeling project that pays back the most, recovering the highest percentage of its cost—147%—at resale, according to the 2022 Remodeling Impact Report, a joint study from the National Association of REALTORS® and the National Association of the Remodeling Industry.
Home remodeling projects aren’t only offering a potential boost at resale; they’re also making homeowners happier. Painting a home’s interior, adding a home office, installing hardwood flooring, and renovating closets made consumers happiest, the report shows.
The remodeling boom has continued since the pandemic began as homeowners’ desires to spruce up their homes grow, whether through large house additions or simply small one-room painting tasks.
“Quite often, an added benefit to home renovations is the possibility of an increase in the home’s value, which is a reason why some people remodel,” says Jessica Lautz, vice president of demographics and behavioral insights at NAR. “This is especially advantageous to a homeowner who may be considering selling their house or converting the home to a rental property.”
For the report, REALTORS® provided an estimate of the likely dollar value of various remodeling projects that could add to the value of a home during resale that was compared to National Association of Remodeling Industry remodelers’ estimations of project costs.
Besides refinished hardwood flooring, new hardwood flooring also had the potential for a high recovery at resale, at 118%, as did upgrading the home’s insulation, at 100%, the survey shows.
Among exterior projects, new roofing and garage doors had recovery rates reaching 100% of the project costs, according to the report.
Kitchen upgrades also showed a high potential payback at resale. NARI remodelers estimated an average kitchen remodel would cost about $45,000. But REALTORS® surveyed estimated that $30,000 of that would likely be recovered at resale—a 67% recovery rate.
House Projects That Bring the Most Joy
The survey also identified projects that made home renovators want to remain in their homes and those that brought them an increase in the enjoyment of their spaces. The home remodeling projects that received a “Joy Score” of 10, the top score, were:
- Painting a home’s entire interior
- Painting one room
- Adding a home office
- Hardwood floor refinishing
- Closet renovation
- Insulation upgrades
The Remodeling Boom Continues
Americans spent $420 billion in 2020 on home remodeling. Contractors report greater demand for services and for larger-scale projects, such as remodels of more than one room, according to the 2022 Remodeling Impact Report. Eighty-six percent of consumers reported that remodeling one area of their home then inspired them to remodel other areas of the house.
“The pandemic has changed the way we use our homes, and many of those changes are here to stay,” Lautz says. “As a result, homeowners needed to reconfigure or remodel how they use their home and maximize space.”
Thirty-five percent of homeowners said one of the top motivators for their remodel was to improve their home’s functionality and livability.
Also, 22% of homeowners were motivated to have greater durability in the materials and appliances inside their homes. Fourteen percent were motivated to improve the beauty and aesthetics of their home.
Source:
“2022 Remodeling Impact Report,” National Association of REALTORS® (April 6, 2022)
