According to the National Association of the Remodeling Industry and NAR, hardwood floors, upgraded insulation, and closet renovations provide the most satisfaction and great value for money spent on remodeling and renovations.
In a joint study released Wednesday, the National Association of Realtors and the National Association of the Remodeling Industry revealed that homeowners were happiest with renovations like painting, adding a home office, and installing new hardwood floors.
The 2022 Remodeling Impact Research Report cited that Americans spent $420 billion in 2020 on home remodeling. This was from the survey conducted among Consumers and home remodelers to study if the coronavirus epidemic had an impact on their home improvement plans.
NAR surveyed 1,182 consumers in the fall of 2021 about the last remodeling project they undertook. The results showed that 83 percent of people said they would have remodeled regardless of the pandemic. However, the pandemic did inspire 86% of those surveyed to remodel additional areas of their homes.
NAR received 210 responses to a survey sent to all 5,778 member companies in the fall of 2021. The survey responses showed that 90% of NAR members had seen an increase in demand for their contracting and remodeling services since the pandemic began. Sixty percent said they had projects that have grown in scope due to the virus, whether it be one bigger project or multiple smaller ones.
“Our research showed that homeowners usually decide to renovate for a variety of reasons,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR, in a statement.
Some families chose to simply paint a room to spruce it up, while others took on larger projects like renovating an attic or basement to add more living space.
The consumer study found that certain interior remodeling projects can bring a lot of joy to people. They did this by looking at the proportion of respondents who were happy or satisfied when they saw their completed project and then dividing that by 10 to score between 1 and 10. The projects with the highest “Joy Scores” are the ones that tend to make people the happiest.
The top 10 home remodeling projects, with nearly all of them earning a perfect score of 10:
- Hardwood Flooring Refinish ( Joy Score: 10)
- Painting the Entire Interior of the Home(10)
- Adding a New Home Office (10)
- Painting One Interior Room (10)
- Attic Conversion to Living Area (10)
- Closet Renovation (10)
- New Wood Flooring (10)
- Insulation Upgrade (10)
- Kitchen Upgrade (9.8)
- Complete Kitchen Renovation (9.8)
In terms of cost recovery, there was some overlap between the top 10 happiest projects and the top 10 most profitable renovations. Many homeowners realized that their most rewarding improvements were also the ones that delivered the best return on investment.
Here are a few examples of such winning combinations:
- Hardwood Flooring Refinish (147 % cost recovery)
- Insulation Upgrade (100 %)
- New Wood Flooring (118 %)
- Attic Conversion to Living Area (75 %)
- Basement Conversion to Living Area (86 %)
- Closet Renovation (83 %)
- Complete Kitchen Renovation (75 %)
- Bathroom Renovation (71 %)
- Kitchen Upgrade (67 %)
- Adding a New Bathroom (63 %)
“This is the first report to measure how the pandemic has affected the price and value of different remodeling projects,” said NARI President Chris Egner.
“We’re happy that NARI members, some of the most experienced remodelers, could provide accurate estimates of remodeling costs that fit the criteria specified in the survey.”
The National Association of Realtors (NAR) surveyed its members in February 2022 and received 2,287 responses on the value of certain renovations. The relators used these responses to estimate how much each project would add to the value of a home during resale and compared this estimated dollar value to the actual cost of the project provided by members of NARI. As a result, they were able to measure the cost recovery % for each project.
For example, NARI remodelers suggested that the typical kitchen revamp would cost approximately $45,000. Realtors stated that $30,000 of that total could be made back through resale value, making the total cost recovery 67 percent.
The report noted that the final cost of a remodeling project and return on investment depend on various factors, including project design, quality of materials, location, age and condition of the home, and homeowner preferences.
According to Lautz, renovating a home can offer many benefits beyond just improving the look and feel of the living space. Quite often, renovations can also add significant value to your property. This is especially beneficial for homeowners who may be considering selling their house or renting it out in the future. By making strategic improvements, you could see a healthy return on your investment.
After a renovation, homeowners said the most important result was improved functionality and livability (35 percent), while 22 percent said they were most pleased with the long-lasting results, materials, and appliances. Just over one in eight respondents (14 percent) said their biggest payoff from the renovation was increased beauty and aesthetics.
“The pandemic has compelled us to alter the way we use our homes, and many of those changes are likely here to stay,” Lautz said. “This means that homeowners need to reconfigure or remodel how they use their home space to make the most of it.”
The majority of homeowners choose to either do the work themselves or hire someone to complete the project. Do-it-yourselfers make up 22 percent of homeowners, while 35 percent leave it to the professionals, and 28 percent hire labor but purchase their own materials.
If you’re trying to decide whether to sell your home as-is or renovate it before putting it on the market, take a look at our detailed post on the topic.