Renovations that attract buyers — and maximize ROI for sellers 

In today's slow market, the pressure is on for real estate agents and home sellers to attract buyers amid economic uncertainty and high mortgage rates. Though pending home sales ticked up in February, the market remains less robust than it was at this time last year.

Among those who are looking to buy, a recent survey indicated that turnkey homes were preferred over fixer-uppers. Meanwhile, homeowners spent more on renovation projects last year than during the height of the Covid-19 pandemic, according to a report released on April 9 by the National Association of Realtors and the National Association of the Remodeling Industry.

While the report's findings indicated that most renovations weren't driven by impending plans to sell, it did shed light on the kinds of projects buyers look for — and which deliver the best cost return for sellers.

Remodel spending tops $600B

The 2025 Remodeling Impact Report, which assessed responses from three surveys conducted in 2024, said homeowners spent about $603 billion on remodels last year — $183 billion more than in 2020.

Despite high home prices, 89% of consumers said housing affordability did not influence their decision to take on a renovation project, compared with 10% who said affordability was a contributing or deciding factor.

Looking to refresh, not resell

Plans to sell didn't play a significant role for many homeowners either, with only 18% saying they intended to sell their home in the next two years. Greater shares said they wanted to replace surfaces in their home that showed signs of wear (27%) or improve their home's energy efficiency (19%), while 18% said they felt it was "time for a change."

When asked about the "most important result" of their remodel, improving a home's quality for eventual resale ranked almost last at 4%, just above adding personality to the space. Functionality topped the list at 28%, with aesthetics and durability tied at 23%.

Which upgrades do buyers want?

Listing agents often suggest improvement projects before sellers embark on the home sale process, but buyers aren't necessarily looking for major renovations. 

In the past two years, agents said demand was highest for kitchen upgrades (48%) and new roofing (43%), while smaller shares of buyers expressed interest in bathroom renovations (35%), new interior paint (32%) and top-to-bottom kitchen renovations (26%).

This buyer interest in upgrades and improvements appears to align with a recent Bright MLS survey that indicated most home shoppers don't want a fixer-upper, with about 56% saying it was "very important" to find a home that didn't need repairs and another 38% citing move-in readiness as a "somewhat important" quality.

Bigger bang for the buck

Most renovations won't deliver a positive ROI, the report found, though returns tended to be higher for simpler fixes.

The only upgrade that resulted in a 100% cost recovery for homeowners was a new steel front door — for a fiberglass door, the return dropped to 80% — while the second-most cost effective project was a closet renovation, with a recovery of 83%. Replacing vinyl or wood windows had slightly lower cost returns of 74% and 71%, respectively.

Low return, high joy

In contrast, homeowners could only expect to recover 60% from either a complete or minor kitchen renovation, while bathroom renovations delivered just 50% of the invested cost. Adding a new bathroom was only slightly higher at 56%.

Even so, the report said kitchen upgrades were among the renovations homeowners were most happy with, earning some of the highest "joy scores," while smaller upgrades — such as new front doors or garage doors — ranked lower.

"Homeowners undertake remodeling projects for numerous reasons, but what remains intriguing is the disparity between the joy experienced post-remodel and the actual cost recovery," said Jessica Lautz, NAR's deputy chief economist and vice president of research, in a news release. 

"While homeowners take pride in seeing their personal tastes and design choices come to life, Realtors may recommend different strategies to enhance the property's resale value."