Is Home Remodeling Worth the Cost? How home upgrades affect property values in Dallas.

The year 2020 witnessed a phenomenal increase in home remodeling, as Americans allocated an astounding $420 billion towards revamping their living spaces. It’s important to know if home remodeling is actually worth the cost.
Let’s take a closer look at this issue and see what we can find out.

Remodeling Impact Report

In 2022, the National Association of REALTORS® and the National Association of the Remodeling Industry conducted a joint survey
to gain insight into how home upgrades affect property values and increase homeowner satisfaction.
The survey estimated project costs along with their potential returns on investments and measured homeowners’ “joy scores”, or satisfaction with the completed upgrade, on a scale of 1-10.
With many people looking to upgrade their homes, this survey serves as an excellent reminder that small improvements can go a long way in enhancing both qualities of life and the selling price.

After the collaborative effort of the National Association of the Remodeling Industry in tandem with The National Association of REALTORS®, they have published their findings in the 2022 Remodeling Impact Report.
The report gathers data on upgrade and remodels projects from homeowners and contractors alike to determine an average cost-value ratio, or return on investment, and a joy score, measuring homeowner satisfaction from 1 to 10.
As real estate trends change swiftly from year to year, this report provides invaluable information for prospective buyers or those looking to make changes to their homes.

Why Homeowners Remodel Their Homes?

When it comes to remodeling their home, many homeowners are looking for a change.
Whether replacing old and worn-out materials, surfaces, and finishes or adding new features to improve livability, the common goal is to upgrade their home.
In fact, according to the 2022 Remodeling Impact Report, most consumers are pleased with the overall result of their projects, and 57% would tackle the same project again in the same way.

Aside from improved aesthetics and comfort, remodeling can add great joy to your home. 84% of owners report feeling an increased desire to be in their homes after renovation work is done;
69% have increased enjoyment in their home; 57% feel happy when they see their completed project with an average Joy Score of 9.6; and 39% report feeling satisfied with the outcome.
Additionally, 69% reported feeling great accomplishment when thinking about their completed remodeling projects.

What is important about remodeling projects?

When it comes to what’s important about remodeling projects, 35% of owners state that better functionality and livability are key, while 22% value durable and long-lasting results, materials, or appliances over beauty or aesthetics (14%). As far as who’s doing the work, 35% hired a professional for the entire job; 28% hired labor but purchased materials themselves; 22% did the entire project by themselves; and 13% contributed some DIY labor.
Costs were not considered since these types of projects are often done by homeowners or as part of more significant renovations.

Most Relevant Remodeling Projects with the highest return on investment

Delving into the world of home remodeling projects can be an exciting adventure, especially when you discover those endeavors that yield the most significant return on investment.
As homeowners, we love the idea of revamping our living space while simultaneously boosting the value of our property.
To make your investment count, remember to thoughtfully weigh your options, aiming for a delicate balance between upgrading for modern buyers without over-improving beyond the norm for your neighborhood.
Embracing the most relevant remodeling projects can empower us with the knowledge to prioritize our efforts wisely.

10 remodeling projects with the highest return on investment, according to the survey.

1. Hardwood Flooring Refinish – Cost Recovery: 147% Median Project Cost Estimate: $3,400

Interior remodeling projects are always an expensive endeavor, but the 2022 Remodeling Impact Report reveals that hardwood floor refinishing is one of the best investments a homeowner can make, recovering a median cost estimate of $3,400 at 147%.
According to the report, this ranks near the top of all interior remodeling projects in terms of cost recovery.
Overall, those who complete interior projects with hardwood floor refinishing can be sure to recoup most, if not all, of their costs down the line.
Homeowners should be aware of these estimations when planning their projects and consult an expert to ensure accurate pricing that fits within their budget.
Refinishing projects are the perfect way to add timeless style and lasting value to any home.

2. New Wood Flooring – Cost Recovery: 118% Median Project Cost Estimate: $5,500

According to our 2022 Remodeling Impact Report, new wood flooring remodeling projects across the United States have seen a median cost estimate of $5,500 with a recovery rate of 118%.
Homeowners can confidently approach their proposed projects knowing that they are likely to recoup most, if not all, of their expenditures upon completion.
Depending on the type of wood selected, there can be maintenance requirements, so it’s important to do your research before you buy.
Overall, replacing old, outdated surfaces can make a significant impact not only aesthetically but financially as well.

3. Insulation Upgrade – Cost Recovery: 100% Median Project Cost Estimate: $2,500

Many homeowners are looking for the best ways to cut costs and improve their building’s interior without breaking the bank.
The 2022 Remodeling Impact Report has great news for those looking to do so – an insulation upgrade will result in a 100% cost recovery, with a median total cost estimate of just $2,500!
With improved energy efficiency and better-quality air, this is one of the most economical structural investments you can make in your home.

4. Closet Renovation – Cost Recovery: 83% Median Project Cost Estimate: $6,000

Thanks to the release of the 2022 Remodeling Impact Report, we now know that some interior remodeling projects have a high-cost recovery rate.
Closet renovations, for example, have a median cost estimate of $6,000 but can recover up to 83% of that cost when you sell your home.
That means you could potentially make over $4,000 back on your investment while enjoying better functionality, aesthetics, and comfort in your home!
So if you’re considering any type of interior remodel, be sure to keep this information in mind, as these projects could save you a lot of money in the long run.
If you’re planning a closet renovation, be sure to consult a professional to get an accurate estimate of the costs involved.

5. Complete Kitchen Renovation – Cost Recovery: 75% Median Project Cost Estimate: $80,000

Homeowners wanting to make sizable upgrades to their kitchen should be comforted in the knowledge that their investment will pay off – on average, a homeowner can expect a 75% return on investment.
With a median cost estimate of $80,000 for an entire remodel, it is one of the costliest renovation jobs, but homeowners can rest assured that they’ll most likely be getting back nearly all of their expenses if they choose to sell.
Furthermore, while renovating a kitchen may take some time and effort, it can result in great returns.

6. Kitchen Upgrade – Cost Recovery: 67% Median Project Cost Estimate: $45,000

Kitchen upgrades can pay off big time in terms of value and cost recovery. According to the 2022 Remodeling Impact Report, homeowners who invest in kitchen upgrades can expect to recoup an impressive 67% of the total median cost of $45,000 when it comes time to sell.
Although this number may vary from market to market, savvy remodelers should consider their return on investment before sinking thousands into their projects.
Considering the long-term financial implications, you could end up with a profitable kitchen that will drive home buyers’ interest.

7. Bathroom Renovation – Cost Recovery: 71% Median Project Cost Estimate: $35,000

According to the report, bathroom renovation is one of the most popular home improvements for homeowners and offers one of the highest cost recoveries at 71%.
The median cost estimate for a bathroom renovation is $35,000. It’s important to note that any specific costs may be higher or lower based on a number of factors, including size and prevailing market conditions.
Furthermore, certain materials and finishes used may also affect overall costs.
Bathroom Renovation is a great opportunity to add value to your home while also realizing the immediate aesthetic benefits that come with a more functional bathroom.

8. Roofing – Cost Recovery: 100% Median Project Cost Estimate: $12000

An impact report on remodeling projects in 2022 shows that roofing projects have the highest cost recovery rate at 100%.
The median cost is estimated to be around twelve thousand dollars. Property owners will appreciate this news when making decisions on remodeling their homes.
Although the installation of a new roof can be expensive, it adds significant value to a property and offers a year’s worth of protection from the elements.
Property owners must assess the condition of their current roof, as well as potential future costs, when determining if a complete replacement is necessary.
Investing in a quality roofing system and ventilation solutions may result in fewer repairs over time and lower maintenance costs.

9. Garage Door – Cost Recovery: 100% Median Project Cost Estimate: $2,000

Home improvement projects are often seen as a way to increase the value of a home, and garage doors are no exception.
According to the 2022 Remodeling Impact Report, installing a new garage door has an impressive cost recovery in percent value at 100%.
The Median Cost Estimate for this type of project overall is estimated to be around $2,000.
With such a significant potential return on investment, it’s no surprise that many homeowners consider replacing old and outdated garage doors with new weather-resistant options.
In addition to increasing their home’s value, they may also enjoy savings from improved energy efficiency and increased security.

10. Fiber Cement Siding – Cost Recovery: 86% Median Project Cost Estimate: $18,600

One of the best investments for remodeling projects is fiber cement siding.
According to the 2022 Remodeling Impact Report, the median cost estimate for this type of material is $18,600, and you can recoup 86% of what you originally spent.
This makes it a practical yet profitable solution to upgrade your property.

All in all, home remodeling projects may be worth it, after all! While ROI rates vary depending on the project type, it appears that many projects have a high ROI rate and are likely to increase the value of your home significantly when done correctly. Additionally, many interior projects have a high joy score which means they will also make your life better while you live there! So if you’re thinking about investing money into improving your living space, rest assured knowing that it has potential financial benefits as well as personal satisfaction benefits too!

Data used in this article: Remodeling Impact Report