Top Home Remodeling Projects with the Highest Historical Return on Investment
While home renovation activity has slowed down from the pandemic-era surge, homeowners continue to invest in their properties, especially as the spring housing market picks up. According to the 2024 Cost vs. Value report from Zonda Media, a housing market research and analytics firm, some renovation projects are now offering historically high returns on investment. For the first time ever, a few upgrades are averaging nearly 200% returns. Garage door replacements lead the way with an average return of 194%, followed closely by steel front door upgrades at 188%, both nearly double their returns from last year.
Home renovation projects with the best returns on investment in the U.S. in 2024
Curb appeal is key
According to Zonda’s report, the projects that yield the highest resale value are primarily focused on enhancing curb appeal rather than on lavish kitchen and bathroom remodels. In fact, exterior improvements dominate the list, with nine out of the top ten projects offering the best return on investment.
“Exterior replacement projects remain the most effective for adding resale value to a home,” said Clay DeKorne, chief editor of Zonda’s JLC Group. However, rising construction and material costs mean not all projects will offer a full return on investment.
Only three projects on Zonda’s list typically provide a 100% return: replacing garage doors, upgrading to a steel front door, and installing a stone veneer. “Luxury bathroom or kitchen remodels might feel rewarding to the homeowner but don’t offer significant returns for sellers,” DeKorne noted.
Minor kitchen updates, such as painting and updating the backsplash, can yield high returns, recouping 96% of costs. Conversely, major upscale kitchen and bathroom remodels show lower returns, at 38% and 45% respectively. “Spending heavily on kitchen upgrades won’t pay off,” said Angelica Ferguson VonDrak, an associate real estate broker in Rhinebeck, New York.
Un-sexy upgrades are more important
With the current high home prices and limited housing supply, sellers need to be strategic to attract buyers willing to pay top dollar, says Todd Tomalak, principal of building products research at Zonda.
Financing renovations or improvements with a home equity loan or line of credit has become more expensive following the Federal Reserve’s 11 rate hikes since 2022, including four last year.
“Installing a new garage door or entry door can have a significant impact,” Tomalak explained. “Such upgrades can make a house stand out and potentially command a higher price.”
To get the most value, consult a local realtor about which renovations will increase your home’s value and which ones to avoid, advises Angelica Ferguson VonDrak, an associate real estate broker.
In some areas, adding a pool could be highly beneficial, while in others, it might not be worth the cost. “Practical upgrades like converting an HVAC system to an electric heat pump or installing a new roof or windows are often more valuable,” VonDrak noted.
Additionally, a thorough cleaning and simple updates can make a big difference. “Decluttering, updating old furniture, or adding slipcovers can make a home feel fresh and new,” VonDrak suggested.