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Deciding whether to remodel a home or not can be a difficult decision to make. Everyone wants to enjoy the home they live in and try to maximize their return when the time comes to sell and move on. In order to see whether it is worthwhile to do a remodel, it is vital to understand how or if renovations will affect the housing market, and to what degree.


In order to see how renovations affect the housing market, it is necessary to compare figures and evaluate trends that are seen in the housing market. In essence, did the value of any single or combination of home renovations affect the resale value of that home, and if so, to what degree was the resale value impacted.

Types of Renovations to Consider

Based on charts and reports, certain renovations are certainly more impactful and directly increase housing resale value. However, other projects cost more than they are worth in the end. For instance, it is extremely popular in 2017 to spend money remodeling or renovating interior sections of the home with the hopes of maximizing return. There is a seemingly increased focus on bathroom upgrades, kitchen remodels, and master bedroom changes.

Contrary to this school of thought, research is showing that interior renovations do not create nearly as much value as exterior renovations. Realtors are saying renovations which enhance curb appeal generate more value for the cost compared to interior renovations. Based on the 2017 Cost vs. Value Report, exterior projects nationally had a 74.9% payback, while interior renovations only showed a 63.5% return.

There are several reasons for this. First, remodeling projects are only focused on enhancing the appearance or functionality of something that is not already broken. The Cost vs. Value Report shows that replacement projects provide 74% return versus remodeling projects, which only provide a 63.7% return. Second, kitchen and bathroom remodeling projects require contractors with a great deal of skill, which increases the price of these projects. Cheaper projects require less costs in labor and materials and generally show the highest returns.

DIY or Contractor?

Deciding to do any renovations alone will most likely have a lower return due to a lack of experience and skill. Hiring professional contractors will ensure that the work is of high quality and that the project will be completed correctly and in a timely manner. The experts at Rules of Renovation advise that projects like painting or installing new carpeting can be successful DIY endeavors. However, more complicated remodels like landscaping or garage door installations, should be done by professionals.


In reality, renovations do not greatly impact the housing market alone. The overall health of the economy will greatly dictate the resale value of homes regardless of renovations. As the economy improves and the housing market increases in value, renovations have a much greater impact on resale value and vice versa.

Geographic Location

In addition to the economy, geographic location plays a large role in how renovations affect the housing market. Where a home is located in the country can be directly correlated with changes in cost vs. Value. For example, the hotter the market, the greater the return will be on renovations. Based on the same report from above, many homes in San Francisco recoup 100% or more of the renovation costs when the home is sold within one year of the renovations. States like Ohio or Wisconsin, however, typically only see returns of 54.9% on average.

Overall, renovations do impact the housing market. The degree to which they do so however is greatly tied to the type of renovation, the condition of the economy, and the geographic location. Exterior home renovations seem to have the greatest return and impact on the market due to the lowest cost for completion.

For more advice on what renovations make sense for you home, ask a First Team agent with experience in your area. Reach out and we’ll connect you with a market expert in your neighborhood. 

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