Thinking of making some changes to your home? You're not alone. Remodeling is on the rise; the Harvard University's Joint Center for Housing Studies predicts 2017 more than 8% growth in home improvement and repair expenditures by the second quarter, while Metrostudy's Residential Remodeling Index (RRI) forecasts "year-over-year growth averaging 4.4 percent in 2017 and 3.3 percent in 2018" after "robust" remodeling activity in 2016 and consistent gains in 18 consecutive quarters since 2011.
With an uptick in mortgage rates, the expectation is that homeowners may turn toward renovations that help them remain comfortable in their existing home, or make changes that will make their home stand out. Sound like you? If you've got renovations on the mind, you'll want to think smart, and that means paying attention to industry trends that can help guide your decisions. Remodeling magazine's Cost vs. Value Report can help.
The 2017 report was just released, with 29 projects that show "how much it really costs for a professional to do a typical remodeling project, as well as how much a real estate pro believes that project will increase a home's value if it's sold within a year of when the work was completed," they said.
The prominent trends this year:
Overall, "The 29 projects in the 2017 report paid back an average of 64.3 cents on the dollar in resale value," with some projects, like the not-very-exciting but very effective loose-fill insulation in the attic, counting a much higher return. In fact, this project is the only one on the list that returns more than 100 percent of its cost, at 107.7%.
Projects that improve curb appeal continue to return well. "Replacing a run-of-the-mill entry door with an attractive yet tough steel replacement" comes in at 90.7%," said Realtor.com, "followed by manufactured stone veneer at 89.4%."
Cheaper is better - "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," said Construction Dive.
One of the additions to this year's report is universal design bathroom, a response to the continued uptick in baby boomers looking to create the ideal living environment for their retirement period. With a $15,730 spend to: widen the doorway; replace the door and light fixtures; reinforce the walls for grab bars, towel hooks, and seats; lower the height of electrical switches and outlets; swap the tub and shower for a walk-in version with seat; and replace the toilet and bathroom vanity and sink with more height-appropriate and accessible versions, you can expect to recoup 68.4 percent, or $10,766.
Kitchens and baths
They're the two things that can sell a home, right? But this year's report shows relatively low ROI for both of these important projects on a midrange spend. A bathroom remodel costs $18,546 and will return $12,024 or 64.8%, while a midrange kitchen remodel will cost an average of $62,158 and return 65.3% or $40,560.
One of the reasons: Projects that involved "remodeling something to make it better, rather than replacing something that's broken" didn't score as high. "On average, the replacement projects sport a 74% return on investment, while our remodeling projects pay back just 63.7%," said Remodeling magazine.
Best Home Design Ideas
But, pump up your spend with an upscale bathroom remodel or master suite, or the addition of a second story or family room, and you may be better off. These projects "saw the biggest year-over-year percentage increases in value, rising between 5.6% and 7.4%," they said. "All those increases outpaced the rise in cost to accomplish the projects, and suggest that real estate pros are rating such home improvements more highly than they did half a decade ago. Why? Because the real estate market continues to recover."
You can check out individual projects, and get geographical breakdowns, here.