Is your home overdue for some upgrades? Are you finally ready to design your dream kitchen? You’re not alone. Home remodeling activity is booming right now. Despite the economy shrinking 3.5% in 2020, home improvement spending grew by 3% last year — and it’s projected to rise another 4.8% through Q1 2022.
Renovating your house can provide valuable benefits, such as improving energy efficiency, creating more usable space and convenience, or simply enhancing the aesthetic — all of which makes your home a more enjoyable place to live. But there’s one big question every homeowner must face when considering a remodel: Is the cost worth it?
We’ve summarized findings from Zonda’s 2021 Cost vs. Value report to shed light on the average upfront cost for common projects, and the potential return on investment (ROI) you could achieve upon resale.*
Projects With the Highest ROI
Projects With the Lowest ROI
Remodeling the Kitchen or Bath: Striking a Balance
The most popular remodels tend to be the most expensive, and the more upscale the project, the lower the return on investment. If you’re considering one of the big two — a bathroom or kitchen remodel — keep in mind that the size and scope of the project will largely influence the cost and ROI.
While a kitchen or bath remodel won’t provide as much ROI as a new garage door or stone veneer, it’s important to remember that these projects exist in a category of their own. The reasons for updating a kitchen or bathroom are drastically different than that of exterior enhancements. If your home is older and dramatically outdated, or if your layout is no longer functional, remodeling the kitchen or bathroom could be necessary. Plus, if you’re thinking about resale, these are the two most important rooms that potential buyers look for in a new home.
The key is to strike the right balance between necessity and desire. While we’d all love a kitchen that looks like it belongs in HGTV’s dream home, with professional-grade appliances and Italian marble countertops, adding too many high-end features could push you way out of your budget and diminish your ROI. It’s also important to consider comparative homes in your area: You don’t want to price your home outside of the neighborhood.
Bottom line: Don’t overdo it. Choosing quality, moderately-priced finishes can help you achieve your desired outcome, while helping you maintain a reasonable budget and providing a higher ROI.