As homeowners continue to invest in upgrading their living spaces, a new report from the National Association of Realtors (NAR) and the National Association of the Remodeling Industry (NARI) highlights home remodeling projects that offer the greatest personal satisfaction, and those most likely to recoup costs.
The 2025 Remodeling Impact Report, released Tuesday, found that adding a primary bedroom suite, upgrading the kitchen, and installing a new roof were the projects that brought homeowners the highest levels of happiness post-completion.
In contrast, the projects with the strongest cost recovery were more modest in scale. Replacing a front door with a new steel model saw a 100% cost recovery rate, while closet renovations (83%) and new fiberglass front doors (80%) also offered significant returns, according to estimates from remodeling professionals.
“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 deputy chief economist and vice president of research. “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.”
Realtors most frequently recommended repainting — either the entire home or single rooms — and replacing the roof as cost-effective ways to prepare a property for sale. These relatively simple projects were also among those with the highest observed increases in demand over the past two years, alongside kitchen and bathroom renovations.
Americans spent an estimated $603 billion on home remodeling projects in 2024, according to the report.
When it comes to why homeowners choose to remodel, the top motivations included replacing worn-out materials (27%), improving energy efficiency (19%), and simply wanting a change (18%). An additional 18% said they planned to sell their home within two years.
Affordability not a major factor
Despite speculation that high mortgage rates and a challenging housing market might drive more people to remodel instead of move, affordability was rarely cited as a deciding factor.
Only 9% of consumers said housing affordability played a role in their remodeling decisions, while 89% said it did not.
“Interestingly, despite the lock-in effect — where low-interest-rate mortgages discourage homeowners from moving — housing affordability isn’t a significant reason why consumers choose to remodel their homes,” Lautz said. “Instead, the substantial housing equity that homeowners have built up over time enables them to invest in transforming their homes while they remain in place.”
Demand for work and how it’s funded
NARI President Jason Hensler noted that remodeling activity remains strong, with 42% of contractors reporting an increase in projects and more than half seeing clients take on larger renovations.
“This report demonstrates that demand for remodeling remains robust, with 42% of NARI members experiencing an increase in contracting projects and 57% observing larger project scopes over the past two years,” he said. “Homeowners are discovering significant value and joy in these investments, from smaller upgrades, such as front doors and windows, to major renovations like kitchens and primary suites.”
Most homeowners funded their renovations using home equity loans or lines of credit (54%), while others relied on savings (29%) or credit cards (10%).
When asked about the impact of remodeling, homeowners most frequently cited improved functionality and livability (28%), durability of materials and appliances (23%), and enhanced aesthetics (23%) as the most important outcomes. Post-project, 64% said they had a greater desire to be at home, while 46% said they enjoyed their living space more.
If money weren’t an issue, 92% of respondents said they would take on additional remodeling projects in their homes.
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