Rising home prices and an improving economy have people feeling good about investing in their homes again. Home improvement spending hit a record $220 billion in 2015, and is expected to grow to nearly $270 billion by 2025, according to a recent report from Harvard University’s Joint Center for Housing Studies.
While spending money on your house can instantly upgrade your standard of living, it’s typically not the best investment for those planning to move soon. The average project returns just 64.3 percent in resale value for homes sold within a year, according to Remodeling Magazine’s 2017 Cost vs. Value report, essentially the same level as last year. The average project cost about 3 percent more this year, and the value it added went up by about 4.2 percent.
The project with the highest return on investment was attic insulation, the only entry on the list with a return of more than 100 percent. In general, the projects that offered the best return on investment continue to be small, or exterior improvements that boost curb appeal.
Three of the five improvements with the biggest return cost less than $1,500. The investment return also varies geographically, with the hottest housing markets seeing the biggest returns. In San Francisco, 21 of the 29 projects analyzed by the magazine had recouped more than their cost.