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The median price of homes in the U.S. recently hit an all-time high of $344,141, up 20.9% from a year earlier. Despite the increase in interest rates, home prices are still expected to rise this year due to low inventory and strong buyer demand. Even with high prices, you can still make some changes to increase the value of your home.
By knowing what home buyers are looking for, you can focus on making the right improvements for your home. Here are five home improvements that won’t break your budget but can offer the highest return on your investment (ROI).
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1. Kitchen remodel
According to the National Association of Home Builders (NAHB), more than half of home buyers (57%) prefer granite or natural stone countertops and about a fifth (21%) seek quartz or engineered stone. Only 8% prefer laminate. The other most desired features in the kitchen are a double kitchen sink (81%), walk-in pantry (81%), and ENERGY-STAR rated appliances (81%). When it comes to the color of the cabinets, home buyers prefer white (32%) or medium brown (26%). Black cabinets are at the bottom with 5%.
>The kitchen is one of the best places to increase the value of your home. You don’t have to do a complete kitchen remodel, often small improvements have the highest return. A minor remodel such as painting, replacing countertops, or upgrading appliances offer the highest ROI at 87%.
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2. Lighting and landscape
First impressions matter. Simple and inexpensive landscaping features such as new plants, mulch, and maintaining garden bed edges can influence both buyers and appraisers. Investing in curb appeal offers some of the best returns. Basic yard care costs about $340 but yields a 539% ROI, and adding three cubic yards of bark mulch at $275 can reap a 536% ROI. Exterior lighting is one of the most wanted features in a home, with 87% rating it as essential or desirable. Other exterior features that are popular include a patio (82%) and front porch (81%).
3. Home office
In a survey by HomeLight, 60% of top real estate agents stated that a home office was the top priority for buyers. With more people working from home due to the pandemic, creating space or converting existing space into a home office can pay off. It can add over $10,000 in resale value with the number potentially rising as more people settle into their work from home routines.
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4. Open floor plan
NAHB’s study found that buyers prefer open layouts. In fact, 85% want an open arrangement between the dining room and kitchen, 79% between the family room and kitchen, and 70% between the family and dining room. Open layout gives more space to entertain friends and family as well as add more functional square footage and shared light.
5. Fresh coat of paint
A fresh coat of paint either outside or inside, can make old surfaces look new. Even pressure washing the exterior to remove dirt and grime can make a significant difference. The ROI for an exterior paint job could be 129%.
Spending more doesn’t necessarily mean a higher return. The key is to spend your money in the right places. With home prices continuing to rise, prioritizing the right home improvement projects can increase your home’s value even more.
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