Expect to Lose Serious Money on These 5 Home Renovations

Zonda Media’s 38th annual Cost vs. Value report indicates that exterior replacement projects continue to provide a higher return on investment than interior discretionary remodels, a trend that has persisted for three decades. The report, which utilizes data from real estate professionals and estimating platforms, highlights a shift in housing demand that favors curb appeal over high-end interior additions. For the home improvement sector, these findings underscore the importance of prioritizing functional upgrades and exterior maintenance to maximize property value in the current market.

The latest Cost vs. Value report from Zonda Media confirms that exterior home improvements remain the most effective way to boost a property's resale value compared to interior renovations. Todd Tomalak, Zonda’s principal of building products advisory, explains that housing demand shifted in 2025, leading to a corresponding shift in remodeling ROI that favors exterior work for sellers. While interior projects are often better suited for long-term residents, those looking for immediate financial gains should focus on projects that enhance the home's exterior or address essential maintenance.

Among interior projects, a minor kitchen remodel stands out as the most lucrative investment, offering a 113% return on investment and remaining the only interior project in the top five. Midrange bathroom remodels also show strong performance with an 80% ROI, reflecting the market's continued demand for updated, functional living spaces. Conversely, the report warns against upscale primary suite additions, which often include expensive features like custom lighting, sound-proofing, and lounge areas that do not significantly increase the home's sale price relative to their high cost.

The 38th annual report also introduced new categories such as solar power, basement remodels, and accessory dwelling units (ADUs) to its analysis. Basement remodels were found to have a solid 71% ROI, while ADUs offer a more modest 41% return. By analyzing data from surveyed real estate professionals and the XactRemodel estimating site, Zonda provides a clear picture for the home improvement industry: while luxury interior upgrades may improve quality of life, they often result in a net loss for homeowners compared to more practical exterior and minor interior improvements.