Dive Brief:
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Remodeling Magazine's annual Cost vs. Value Report found that remodeling a home will recover an average of 64.3% of what homeowners invested in the revamp when they sell their homes this year, up marginally from 64.2% last year.
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Attic insulation proved to be the remodeling project that gave the most return on a homeowner's investment, with a 107.7% return. Entry door replacement and manufactured stone veneer followed with a 90.7% and 89.4% recoupment, respectively, while bathroom addition lagged behind with only a 53.9% return on investment.
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The report revealed that three of the five projects that provided the biggest returns on investment are also the cheapest to complete, boosting their cost-recouped scores.
Dive Insight:
The new report by Remodeling Magazine highlights some of the benefits associated with upgrading a home at a time when elevated prices and tight inventory levels have begun to spark increased interest in repair and renovation work to improve a property's value.
The National Association of Home Builders' Remodeling Market Index recorded a reading of 57 during the third quarter of 2016, an increase of four points from the previous quarter, marking the 14th consecutive quarter that the index increased.
The report comes as the Harvard University’s Joint Center for Housing Studies forecasts annual growth in home improvement and repair expenditures to continue this year, exceeding 8% by the second quarter before leveling off later this year.
While supply shortages continue to push home prices upward, the percentage of fixer-upper homes is also growing. In October, real-estate listing website Zillow reported that the percentage of fixer-upper homes on the market was up 12% from five years ago.
The figures released by Remodeling Magazine were calculated by asking consultants in various markets to estimate the average cost for 29 home improvement projects. The report then asked real estate agents nationwide to estimate the expected resale value of these revamps.
