Insights on Home Remodeling Costs in the Cost vs Value Report 2022
Home remodeling costs are increasing, but the most valuable home improvements have stayed the same in the Cost vs Value Report 2022.
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Pandemic-related supply chain issues continued to feed a decade-long annual increase in home remodeling costs. This is a key trend in the Cost vs Value Report 2022 just released by Zonda. All 22 projects in the annual report became more expensive, with home remodeling costs increasing an average of 9.2% overall.
“Across the board, material costs have been increasing for the last decade, and increasing sharply for the past two years,” say editors at Remodeling magazine, a Zonda company. “And even while values have also been steadily inching up for the past five years, the high numbers on the bottom of the ratio (cost) bring down the overall number, which is return on investment.”
Thankfully, the decline in home improvement project values was only 1.2 points below the average ROI from 2021. Additionally, the top five most valuable home improvements remained the same year-over-year, and other interesting trends also emerged.
What is the Cost vs Value Report?
Now in its 35th year, the annual Zonda Cost vs Value Report looks at nearly two dozen common remodeling projects and compares the average cost of those projects with the value the same projects would bring to a home’s resale value. The data is calculated on national, regional, and local levels for 150 major U.S. markets. Resale values were previously derived by surveying real estate professionals. Beginning in 2021, Zonda revised the Cost vs Value report’s methodology to include numerous variables that affect the sale price of existing homes, including local GDP, home sales, home values, housing starts, and more.
The Most Valuable Home Improvements in the Cost vs Value Report 2022
The same five projects that had the best ROI in 2021 took the same top five spots this year as well. The remodeling costs for these projects increased less than remodeling projects overall (7.2% vs. 9.2%), which helped them retain more of their value year-over-year (an average 0.88% decrease in cost recouped, compared to the overall 1.2% dip nationally).
Exterior Projects are Among the Most Valuable Home Improvements
Another interesting carryover from the 2021 Cost vs Value Report is that exterior home improvements remain the most lucrative projects. Of the 22 Cost vs Value 2022 projects, half are interior projects and half are exterior. Except for minor kitchen remodel, all interior projects rank lower for ROI than exterior projects. Remodeling editors suggest that this indicates the weight that curb appeal has on home values.
“Prospective buyers who see a ‘buttoned up’ exterior form the impression that the house is in good shape,’” they said. “The reverse case – that is, driving up and seeing a dilapidated garage door or a house in need of a paint job – has the reverse effect: Buyers immediately start to downgrade what they are willing to pay for the house.”
Using the Cost vs Value Report 2022 to Gauge Your Home Remodeling Costs
Knowing that home remodeling costs continue to increase can be intimidating, but the Cost vs Value Report offers homeowners a great deal of perspective. Many regions and individual markets have lower costs and better ROIs than the national averages. For example, Improveit customers will see an average 62% ROI on bathroom remodeling compared to 58.9% nationally. So be sure to look at numbers for your area as you plan your home improvement projects.
Remember also that the Cost vs Value Report specifically measures the value of a project when the home is sold. There’s no way for the calculations to include the personal value you feel from enjoying a beautifully updated bathroom, kitchen, or outdoor living space. Nor do the numbers reflect value-added elements like transferrable lifetime warranties, increased energy efficiency, low-maintenance finishes that make your life easier.
While the Cost vs Value Report 2022 indicates some useful, these numbers aren’t everything. Ultimately, remodeling your home should be about making the changes that you and your family want to enjoy today. That’s real value, and Improveit is here to help!
Reach out to learn how to get the most value for worry-free remodeling that will make lasting improvements in your home and your life.