7 Home Improvements That Might Actually Lower Your Home’s Value

When homeowners invest in renovating their properties, it’s reasonable to expect the home’s value to improve. However, the reality is more nuanced. According to the Joint Center for Housing Studies at Harvard University (JCHS), spending on improvements and repairs for owner‐occupied homes surged by 82 % from 2015 to 2024.

Also from the National Association of REALTORS®, in 2024 alone, Americans spent an estimated US$603 billion on home remodels.

Although these figures point to significant investment activity, they also underscore a key point: higher spending does not necessarily guarantee proportional gains in resale value. The Home-y Digest estimate shows the average ROI across all home improvement projects hovers around 70%, meaning homeowners typically recoup about two-thirds of their renovation costs.

Homeowners are spending heavily on improvements — yet most see modest value increases. That gap between cost and return sets the stage for why some well-intended home improvements may actually lower a home’s market value when they don’t align with buyer expectations, market norms, or functional appeal.

Misconceptions About Value-Adding Renovations

Many homeowners assume that any investment in their home will automatically translate into increased resale value. The Remodeling Impact Report by the National Association of REALTORS® (NAR) found that only some remodeling projects recover their full cost at sale: the highest-cost-recovered project (a new steel front door) recovers about 100% of cost. In contrast, many other projects recover significantly less.

If an upgrade doesn’t align with the expectations or budget of likely buyers in your market, it can become a sunk cost—or worse, an impediment to sale. Overcapitalisation, or spending beyond what comparable homes justify, is a real risk.

Over-Personalised Interior Design

Upgrades intended for enjoyment may not be structured to appeal to future buyers. Extremely bold colour schemes, unique themed rooms, or custom wallpapers that reflect personal taste may reduce buyer appeal.

A Zonda report states that the top ROI projects are typically exterior replacements or neutral upgrades that appeal broadly; interior projects with high customisation tend to deliver lower ROI.

If your design choices require future owners to change flooring, repaint walls, or undo themed built-ins, you may be signaling extra cost and effort—and that tends to depress offers rather than raise them.

Poor-Quality DIY or Unpermitted Work

Homeowners often attempt do-it-yourself (DIY) renovations or use non-licensed labor to save money. But even if the upgrade looks finished, inspections or appraisals may penalise poorly executed or unpermitted work.

The Remodeling Impact Report by the National Association of REALTORS® highlights that one key metric is cost recovery, and the quality of work strongly influences it.

A poorly executed DIY plumbing or electrical remodel may raise red flags during property inspections and deter buyers—even if no major issue is visible yet. The risk is especially high if modifications involve structural, electrical, or mechanical systems.

Thus, if you go the DIY route, ensure strict compliance with permit and code requirements and that the workmanship reflects professional standards; otherwise, you may lower your home’s appeal and thus value.

Luxury Additions in the Wrong Market

One common mistake: adding high-end amenities such as a wine cellar, gourmet kitchen, or swimming pool in a neighbourhood where homes don’t carry the same level of luxury. According to the Cost vs. Value Report by the Journal of Light Construction, exterior replacements deliver more substantial ROI than large, discretionary interior remodels; the more complex a project is, the lower its ROI.

Map your renovation to the neighbourhood norm and comparable properties. If your house becomes the outlier, buyers may discount the price.

Converting Bedrooms or Garages

Functional living spaces—especially bedrooms and garages—are highly valued in the resale market. Altering them in ways that reduce the number of bedrooms or usable garage space can weaken resale appeal. For instance, converting a garage into a gym may reduce the home’s appeal to families, and eliminating a bedroom to create a large closet may narrow the market.

Since many buyers prioritise functionality (e.g., X bedrooms, Y car garage), reducing those features—even for a luxury upgrade—can reduce the pool of interested buyers, thereby lowering value.

Outdated or Low-Quality Fixtures and Finishes

Not all upgrade spending yields value. Finishes that appear cheap, mismatched, or outdated can reduce the home’s perceived quality. According to the Cost vs Value data, minor kitchen remodels (without layout changes) continue to yield >100% cost recovery, but major remodels recover much less.

If you invest in one area with high-end materials, but adjacent areas remain dated or mismatched, buyers may perceive the home as “partially done” and discount accordingly. Consistency and moderate quality often outperform extremes—either ultra-cheap or ultra-luxurious—finishes, especially when resale is a goal.

Landscaping and Exterior Mistakes

Exterior upgrades and curb appeal remain important—but not all exterior changes are created equal. Some landscaping features (such as pools or very large water features) may attract fewer buyers because of perceived maintenance costs or suitability. A report from the National Association of Realtors®on landscaping projects found that while basic lawn services yield extremely high ROI (217%), large water features yield lower ROI.

Adding a pool or heavy-maintenance landscaping in a market where buyers expect low-maintenance yards may lower your home’s appeal and, by extension, its value.

Tip: Focus on clean, low‐maintenance, broadly appealing landscaping. Avoid extremely niche features unless you’re in a premium neighbourhood that expects them.

How to Renovate Wisely for Resale Value

Given these potential pitfalls, how can you approach renovation decisions more strategically?

• Focus on broad-appeal, functional upgrades—such as neutral paint, good quality finishes, and improved layout. These changes minimise buyer friction and keep the home attractive to a wide range of buyer types.
• Stick to neighbourhood norms—the Cost vs Value Report shows that exterior replacement projects deliver the greatest return when they align with peer homes.
• Ensure work is permitted and professionally done—the Remodeling Impact Report shows that buyer and REALTOR® perceptions emphasise condition and quality.
• Avoid highly personal or niche features—while they may maximise your enjoyment, they shrink buyer appeal and may reduce value if you plan to sell.
• Consider lifecycle & maintenance costs—features that add a high-maintenance burden can deter buyers. For example, a high-maintenance yard or custom pool may appear as a liability rather than an asset.
• Prioritise cost-effective projects—smaller, well-executed projects (garage door, entry door) often deliver better ROI than large-scale renovations.

Read the original article on Crafting Your Home