CHM Blog

Which Home Improvements Actually Increase your Home's Value?

The answers might surprise you, as the classic home improvement projects homeowners are most interested in, such as sparkling new kitchens and baths, rarely deliver the return on investment they expect.

Actually, the top projects with the greatest returns in resale value are more often related to a home’s curb appeal.

Homeowners can expect a 100% return on investment on only a handful of renovations or additions, such as converting a heating, ventilation and air-conditioning system to electric; replacing garage doors; installing a stone veneer; or upgrading to a steel front door. A minor kitchen remodeling — such as painting and updating the backsplash — did provide high returns, but major kitchen and bathroom renovations did not, a recent Zonda survey found.

Home renovation projects with the best returns on investment in the U.S.

1. HVAC electrification Change traditional furnace to electrified heat pump Cost: $17,747 Resale: $18,366 Return: 103%

2. Garage door replacement Cost: $4,302 Resale $4,418 Return: 103%

3. Replace house siding with stone veneer Cost: $10,925 Resale: $11,177 Return: 102%

4. Entry door replacement With a steel door Cost: $2,214 Resale: $2,235 Return: 101%

5. Vinyl siding replacement Cost: $16,348 Resale: $15,485 Return: 95%

6. Fiber-cement siding replacement Cost: $19,361 Resale: $17,129 Return: 89%

7. Midrange basic kitchen remodel Refaced cabinets and new countertops, flooring, appliances and fixtures Cost: $26,790 Resale: $22,963 Return: 86%

8. Vinyl window replacement Cost: $20,091 Resale: $13,766 Return: 69%

9. Midrange bath remodel New countertops, fixtures and tile Cost: $24,606 Resale: $16,413 Return: 67%

10. Wood window replacement Cost: $24,376 Resale: $14,912 Return: 61%

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market improved by +67 bps last week. This was enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Services, 2) Central Banks and 3) Oil.

1) Services: The most important domestic economic release this week is ISM Non Manufacturing PMI which accounts for 2/3 of our economy. The ISM Manufacturing report was very weak but we have seen some stability in the services sector.

2) Central Banks: We will get key interest rate decisions and policy statements from the Bank of Canada and the Reserve Bank of Australia. Both are expected to NOT change their key rates.

3) Oil: The recent announced Saudi output cut of 1M barrels a day has oil prices rising.

This Week's Potential Volatility: High

This morning markets are trading under mild pressure. Volatility has started high and will likely stay that way depending on how news develops this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.