Recent Data Suggests You Shouldn’t Spend Another Dime on Home Improvements Before Speaking With a Local Real Estate Agent
Lighter Side of Real Estate • June 14, 2023
If you do renovations or home improvements to your house, common sense says that doing so would raise the value, right?
The good news is that they do increase the value of your house!
The not-so-great news is that the amount your home goes up in value probably won’t be as much as you even spent on the project…
In fact, as CNBC recently reported, according to the 2023 Cost vs. Value Report, only 4 home improvement projects produce a positive return-on-investment. And if that’s not surprising enough, they probably aren’t even ones you’d think would make the list! The current projects that will net you the most profit when you sell your house are:
- Switching out a traditional furnace to a heat pump. That’ll put an extra $619 in your pocket based upon national averages.Replacing your garage door. That will add $116 to your bank account.
- Replace your siding with a stone veneer. Add $192 to your balance sheet.
- Change out your front door with a new steel door. Treat yourself to some lunch with the $21 you’ll recoup.
If you combined all four of those exact home improvement projects, you can expect to net a whopping $948!
The big, sexy projects most people think about doing to improve value — like a full-blown renovation of an existing bathroom or kitchen — will certainly add value, but they won’t increase the value as much as they cost to do. Those types of projects recoup less than 50% of what they cost a homeowner.
That said, those are based upon national data and averages. Here’s a link to the data CNBC cited in their article, which allows you to choose your specific area to get a better idea for how much you can expect to recoup on a project where you live. But the general gist is always the same: Very few projects will produce a positive return, regardless of where you live. And when they do, it’s rarely all that much of a return.
Should You Even Update or Renovate Your House at All?!
Once the initial shock wears off, the next question most homeowners have is whether they should waste any time or money on improving their house at all. But before you decide to never spend another cent or minute of your time on your house, here are a few things to consider:
- Updates and renovations will make your house more attractive and appealing to potential homebuyers.
- An outdated house (or one in need of repairs) can bring your value down. You need to maintain your house to about the level of other homes in the area, if you want to fetch a similar price to other recently sold homes.
- If your home isn’t updated, it can take a longer time to sell, or not sell at all, if it’s a slow market.
So you still need to make sure you’re keeping your house in good shape, and improving it over the years, if you want your house to sell readily and for as much as possible.
Things to Do and Keep In Mind if You Renovate
In order to maximize the money you spend on home improvements, here are a few key things you should do:
- Speak to a local real estate agent before doing any projects. Basing your decision upon national (or even regional) data can be misleading and inaccurate. Just because a particular type of project tends to produce a better return, and another does not in most areas, that might not be the case in your specific price range and market. A local agent will be able to help you assess whether or not a project will improve the value of your home enough to make it worth the investment.
- Don’t underestimate the value of your enjoyment. While a project may not produce a positive financial return, that doesn’t mean it won’t give you great satisfaction and enjoyment. There’s nothing saying you have to make money on the projects and home improvements you do, so long as you know what to expect ahead of time and aren’t surprised when you decide to sell.
- Be frugal and thoughtful about what you spend on improvements. New and updated is better even if it isn’t the highest end finishes or materials. Unless you’re in the luxury market, you can probably get away with doing lower-grade upgrades if you’re concerned about making as much of your money back as possible.
- Keep it neutral and universal. If you’re concerned about recouping as much money as possible, try to do projects and updates that will appeal to almost every buyer by keeping them neutral in style and color.
The Takeaway:
Many homeowners are surprised that their home renovations and improvements don’t increase the value of their home as much as they hoped, or even as much as they cost to do, when they decide to sell their house. But the reality is, very few projects produce a positive return-on-investment, and it isn’t very much of a return when they do.
If you want to maximize your ROI on home improvements, make sure to speak with a local real estate agent to help you assess whether a project makes sense before you spend time and money on it.
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Spring Sellers Have an Edge. Here’s Why. Homeowners looking to sell usually want three things: plenty of interested buyers, strong offers, and a short timeline. Spring is the season that most often delivers all three. So, if a move has been on your mind this year, this is the window where momentum tends to work in your favor. Here’s what makes this season so powerful for sellers. 1. More Buyers Will Be Looking Typically speaking, in the housing market, there’s no more popular time to move than the Spring. Historically, data coming out of ShowingTime proves that’s when buyer activity peaks each year. Take a look for yourself (see graph below): And this year, there’s more than just the seasonal trend working in your favor. Mortgage rates are also sitting near 3-year lows – and that combination matters. More buyers + improving affordability = more eyes on your house . That doesn’t mean the market will return to the frenzy of the pandemic – far from it. But it does mean more buyers will be ready to re-enter the market. And that’s good for you. As Redfin says: “Homebuying demand is improving . . . and mortgage-purchase applications are sitting near their highest level in three years. . ." You should make sure your house is listed so you can take advantage of the uptick in demand. Because more activity means one thing: more opportunity to get a deal done. 2. You May Get More Offers With more buyer demand, it makes sense that you may get more offers on your house. And history shows that’s usually true. If we look at the data for the last three years from the National Association of Realtors (NAR), and take the averages for each month, it’s clear sellers in the Spring get more offers (see graph below): Now, don’t expect the excessive bidding wars that were so famous in 2020 and 2021. But it does mean, seasonality could help you out this Spring. As Realtor.com explains : “Spring typically brings out more buyers who are ready to make a move before summer. Listings see more views, showings, and offers during this season .” And that could be really good for your bottom line. 3. Homes Usually Sell Faster There’s one more predictable pattern that happens pretty much every Spring based on research from Realtor.com. Homes sell faster (see graph below): On average, homes sell 20 days faster in the Spring compared to the Winter. That’s almost 3 weeks shaved off your timeline. And that's a difference you can feel. Since homes have been taking longer to sell lately, listing your house during what’s usually the most active time of the year means you’re setting yourself up to move as quickly as possible. And isn’t that what sellers really want? The faster your home sells, the earlier you can move on to what’s next for you. If you’re eager to go on to your next chapter, need to downsize , or you’ve run out of space , Spring may be your best time to sell. Bottom Line Spring doesn’t guarantee a sale. Strategy still matters. But this season gives you something valuable: momentum. More buyers. More activity. More opportunity. The real question is: if you’re going to sell this year, why not do it when the odds are in your favor? Let’s talk about what selling this season could mean for your house and your timeline.
Are Home Prices Dropping? Here’s the Real Story. You’ve probably seen posts on social media talking about how “home prices are falling.” And when you see something like that, it’s normal to wonder: Is this the start of a crash? What does this mean for my house? Let’s clear this up right away. This is not a crash. And your home is not suddenly losing a lot of value. The National Story – Prices Are Still Going Up Here’s what often gets left out of what you’re seeing online. While some markets are experiencing slight declines, they’re the minority. Most places are still seeing prices rise or at the very least, hold steady. That’s why, at the national level, home prices are still rising, just at a slower pace. According to the National Association of Realtors (NAR): “Home prices continued to rise in the fourth quarter of 2025. National median prices rose 1.2% year over year to $414,900.” That’s not the rapid growth of a few years ago, but it’s not a downturn either. And just to really drive this home, here’s a look at the data from NAR at a regional level, so you can see that the negative narrative spun up online isn’t the whole truth (see graph below): Home prices are up (or at least holding steady) in the Northeast, Midwest, and South. The West has seen some small declines in certain markets, but “small” is the key word. There is no wave of falling prices across the country. Instead, there are just a few pockets adjusting after several years of what’s typically considered unsustainable or exponential growth. Yes, Some Markets Have Come Down, But Look at the Bigger Picture. Okay, but what about the places where prices have declined? According to ResiClub and Zillow, that’s not a cause for major concern. When you zoom out and look at those same markets over the past five years, the story changes (see graph below): In the areas with recent declines, home values are still significantly higher than they were just five years ago. That’s a direct reflection of how much home values have gone up. Online chatter tends to shine a spotlight on the few areas that are down. But the bigger picture shows most homeowners are still in a very strong position. Of course, every market, and every home, is different. But broadly speaking, home values are holding steady. And this isn’t a sign of widespread trouble in the market. Bottom Line Despite what you may be seeing online, home prices are rising or holding steady in most parts of the country. If you’re curious what your home is worth today, let’s take a look at the numbers together. Because context, and local expertise, matter more than what you’re seeing online.
The Hidden Advantage Repeat Buyers Have Right Now What if you didn’t have a mortgage payment on your next house? It may sound a little unrealistic. But for a number of homeowners, it’s actually doable. Nearly 3 in 10 homes purchased today are bought in cash , according to the National Association of Realtors (NAR). That’s far more than the pre-pandemic norm (see graph below): So, how are so many buyers pulling that off? The answer is simple: home equity . Back in 2020-2021, mortgage rates and the number of homes for sale were both at all-time lows. And that combination pushed home prices up, fast. If you owned a home during that time, it likely gained significant value – maybe even enough to buy your next house in cash . NAR explains : “. . . rising home equity has armed many existing homeowners with the financial leverage to make cash offers , allowing them to convert years of price appreciation into immediate purchasing power.” Here’s why you may want to go that route yourself, if you have enough equity to do it. 1. Your Offer Becomes More Attractive Sellers value certainty. And an all-cash offer removes one of the biggest unknowns in a transaction: financing. As Rocket Mortgage explains: “ Cash offers are attractive to sellers. Sellers often prefer to work with cash buyers if they can because they don’t have to worry about a buyer’s financing falling through at the last minute.” In many markets, an all-cash offer can give you a serious edge. 2. You Can Close Faster And since you don't have to worry about underwriting, lender approvals, and loan processing, the time it takes to close shrinks. Cotality puts it this way: “Cash buyers have always enjoyed an edge over borrowers. They remove financing risk, reduce delays, and often close in days rather than weeks .” If the owner of the house you're buying is already under contract on their next home or they just need to move fast (like for a new job), that speed is a real draw. 3. You Won't Have Monthly Mortgage Payments When you buy in cash, you don’t have to finance your purchase. That means you don’t have to worry about what today’s mortgage rates are and you own the house outright from the day you close. And that’s a big deal. No mortgage. No monthly payment. Full ownership. That financial freedom opens the door for other big lifestyle benefits. Zillow explains: “Paying in cash means you own your home outright. This eliminates the need for monthly mortgage payments, freeing up your finances for other priorities like savings, travel, or home improvements.” 4. You May Get a Better Deal And here’s one more thing that surprises a lot of homeowners: cash buyers often pay less for the house. According to Cotality, all-cash buyers tend to spend roughly 9% less on the house than buyers who use a mortgage. That’s because some sellers are willing to accept lower offers to get a deal done quickly, with more certainty of closing, and fewer financing hoops to jump through. As Cotality explains: “From a seller’s point of view, a lower but reliable offer can feel preferable to a higher one that may collapse weeks later.” And that advantage grows with each passing year (see graph below): Is an All-Cash Move Realistic for You? Not every homeowner will buy their next house outright in cash. And that’s okay. But the bigger takeaway is this: the equity you’ve built may give you more options than you think. Whether that means downsizing and eliminating a mortgage entirely, or just relocating with stronger negotiating power, your current house may be what makes it possible. Bottom Line Before assuming you’ll need another traditional mortgage, it’s worth asking one simple question: How much equity do you really have? Because the answer might change what you thought your next move could look like. Curious what your home equity could do for you? Let’s run the numbers and see what kind of buying power you’re really sitting on.
