A large blue house with white trim, stone veneer along the lower third and two white garage doors.

Home Improvements That Increase Value in 2021

If you’re thinking about jumping on the booming home improvement trend, we’ll help you identify projects that add to your property value — and avoid projects that decrease it.

For many Americans, the pandemic sparked a ton of interest in home improvement. U.S. homeowners spent $420 billion fixing up their homes in 2020, an increase of 3% over the previous year, according to the Joint Center for Housing Studies of Harvard University, and the trend is expected to continue.

Some people want to make their homes more comfortable for doing, well, pretty much everything from home. Other people are renovating their recently purchased fixer-upper. Still others are preparing their homes for sale.

Whatever your reasons, if you're ready to improve your home, it's helpful to know which projects will increase your property value so you recoup as much of your costs as possible for the best return on your investment.

Know the Current Local Market

Some advice is timeless and universal (like choosing neutral colors for interior walls), but costs and tastes differ across the country and change over time.

When doing your homework on home improvement trends, be sure your information is current and tailored to your area.

Cost First, Value Later

When you take on home improvement, whether you do it yourself or hire professionals, you're taking on costs for projects that, if done right, will add to the value of your home. But keep in mind that the payback is rarely 100%, and you won't get to enjoy the financial benefit of the work until you sell the house.

If you're getting the house ready to sell, be sure the colors and materials you choose are on trend, aligned with the style of your home and consistent with neighborhood character.

Avoid Overly Custom Changes

It makes sense to prioritize projects that make you more comfortable and make the home more functional for your needs while you live there. But, unless you're never planning to move, be sure to avoid changes that are too customized or personal, otherwise, you'll end up decreasing your property value. That luxury bathroom or bold tiling choice will require time, effort and money for the next homeowner to replace if they don't share your taste.

Top Home Improvements that Add Value in 2021

One of our favorite tools is Remodeling Magazine's 2021 Cost vs. Value report. It lists the average cost of home improvement projects and the money you're likely to recoup. You can look at national, regional, city and zip code statistics, and you can sort by project name, job cost, resale value and cost recouped.

The list doesn't differentiate between do-it-yourself (DIY) and professional work, so if you go the DIY route, you'll likely spend less than the prices listed — but the amount you recoup will also depend on how well you do the work.

Nationally, these are the top five projects that returned the greatest percentage of costs at resale, according to Remodeling Magazine's 2021 report: 

1. Garage Door Replacement

A new garage door updates the look of the home and adds to curb appeal. The national trend is a four-section steel door with foam insulation and insulated glass windows across the top panel. It's on the low end for project costs, averaging just under $4,000, but on the high end of return: You'll recoup about 94% of costs, according to Remodeling's report.

2. Manufactured Stone Veneer Installation

Homebuyers like a little rock on their homes. Installing manufactured stone siding along the lower third of the street-facing façade adds to curb appeal. This upgrade averages just over $10,000 nationally, but you'll recover about 92% of the costs when you sell. 

3. Minor Mid-Range Kitchen Remodel

A fancy chef's kitchen might be your dream, but if it's not the next homebuyer's dream, too, you can expect a lower payoff. If your goal is to recoup as much of your costs as possible, better to go with a minor mid-range kitchen remodel. The national average cost is just over $26,000 and you'll recoup about 72%.

Remodeling suggests replacing the cabinet and drawer fronts with shaker-style panels and new hardware, getting new energy efficient appliances, replacing laminate countertops, getting a mid-priced sink and faucet, new floors and adding a fresh coat of paint

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4. Fiber-Cement Siding Installation

Adding factory primed and painted fiber-cement siding is a high-value upgrade nationally (69% cost vs. value), but this is where paying attention to your local market is important: In Seattle, vinyl siding replacement makes it into the top three, with 88% recouped costs, while fiber-cement siding doesn't make the top five.

5. Vinyl Window Installation

New insulated vinyl windows round out the top five nationally for projects with the highest return on investment, according to Remodeling's report. This improvement adds curb appeal and energy efficiency to the home. The national average cost is just over $19,000 with 69% recouped in value.

For comparison, at the bottom of Remodeling Magazine's national data is an upscale primary bedroom addition: You'll spend more than $300,000 on average, but you'll only recoup about 48% of costs.

Projects That Might Decrease Value

Not every home project is an improvement. These projects could decrease your home's value, so you might think twice before you invest in them.

Swimming Pools

With more people staying at home because of the pandemic, adding a swimming pool has increased in popularity among homeowners, but the experts are divided on whether these will add to or detract from the desirability of the home to potential buyers. Many people, especially parents of young children, see pools as a safety hazard. Pools also require time and money to maintain, and they take up a lot of space that the kids could use to run around and play.

Converted Garage

If you're thinking about adding square footage to your living space, you might start eyeing your garage, but, depending on where you live, converting your garage might reduce your home's value, along with sacrificing parking spots. People like to use garages for their cars, outdoor equipment and storage.

Luxury Appliances

Unless you're in a high-end market, you won't recoup most of the costs for luxury appliances. It's better to go with mid-range, energy efficient appliances in the current style. (Stainless steel continues to be the top choice.)

Expensive Landscaping Features

Creating beautiful outdoor spaces is a well-known way to increase value, but it is possible to go overboard. Over-the-top, customized landscaping features like an outdoor pizza oven, koi pond or a big concrete patio might not appeal to homebuyers. Instead of being excited, they might be thinking about how much it will cost to tear it out.