Housing market conditions are squeezing the equity out of homes, but the right home improvement on the right home can help shore up equity and even improve the home's value.

The work will also be a plus when it's time to sell.

The Federal Reserve's third quarter U.S. Flow of Funds Accounts says the amount of equity homeowners nationwide hold in their homes slipped in the third quarter to just over 50 percent, the lowest level on record.

Falling home prices, a surge in cash-out refinances, home equity loans and lines of credit and an increase in 100 percent or more home financing has been chipping away at home equity.

Economists say the number could drop below 50 percent by the end of the year.

However, homeowners who perform improvements that bring their home up to par with other homes in the neighborhood -- or make them slightly above par -- stand the best chance of holding onto equity and even increasing in value.

That's especially true if homeowners perform improvements that provide the greatest cost-vs-value return for the money.

Hanley Wood's Cost vs. Value 2007 report takes the guess work out of deciding which are the best home improvements for your money. While you should consider neighborhood and regional market conditions, here's a look at the top half dozen home improvements, on a national level, that are most worth your time and money.

Each job description includes 1) the national average cost of the work, 2) the national average dollar amount your home's value is boosted by the work and 3) the average percentage of the amount spent on the work which becomes added value.

Wood Deck Addition: A 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers. Includes a built-in bench and planter of the same decking material, stairs, and railings, $10,347; $8,835; 85.4 percent.

Siding Replacement: Replace 1,250 square feet of existing siding with new vinyl siding, including all trim, $9,910; $8,245; 83.2 percent.

Minor Kitchen Remodel: In dated, 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, reface cabinet boxes with new raised-panel wood doors and drawers, including new hardware. Replace wall oven and cooktop with new energy-efficient models. Replace laminate countertops; install mid-priced sink and faucet. Repaint trim, add wall covering, and remove and replace flooring, $21,185; $17,576, 83 percent.

Wood Framed Window Replacement: Replace 10 existing 3-by-5-foot double-hung windows with insulated wood replacement windows, exterior clad in vinyl or aluminum. Wrap existing exterior trim to match. Leave existing interior trim intact, $11,384; $9,241; 81.2 percent.

Vinyl Window Replacement: Replace 10 existing 3-by-5-foot double-hung windows with insulated vinyl replacement windows. Wrap existing exterior trim to match. Leave existing interior trim intact, $10,448; $8,290; 79.3 percent.

Bathroom Remodel: Update an existing 5-by-7-foot bathroom by replacing all fixtures. Include a 30-by-60-inch porcelain-on-steel tub with 4x4-inch ceramic tile shower walls; new single-lever temperature and pressure-balanced shower control; standard white toilet; solid-surface vanity counter with built-in sink; recessed medicine cabinet with light; ceramic tile floor and vinyl wallpaper, $15,789; $12,366; 78.3 percent.

Published: January 2, 2008

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.