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Should You Remodel Your Home in This Economy?

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Homeowners considering a remodeling project in the current economic climate might find themselves asking, “Is it the right time to invest in my home?” With slower industry growth and rising material prices, the decision to remodel is more complex than it once seemed. However, with careful planning and the right strategies, homeowners can confidently move forward, ensuring a rewarding investment and a beautifully transformed home.

Areté’s professionals are here to break down the economic factors affecting the remodeling industry and shares actionable tips to help you make informed decisions about your next project. We will help you weigh the pros and cons and give you tips on achieving a strong return on investment (ROI).

Understanding the Economic Impact on Remodeling

Slower Industry Growth

The remodeling industry, which had been booming for several years, is now slowing, with projections showing only a 1% growth by 2025. Contributing to this slowdown are several macroeconomic factors, including rising recession risks, tariffs, and policy uncertainties.

Rising Material Costs

One of the most pressing challenges for homeowners and remodeling professionals alike is the increase in building material prices. According to the National Kitchen and Bath Association’s KBMI report, tariffs on Chinese imports are predicted to drive up material costs by a weighted average of 6%. Items like small appliances, major household appliances, and plumbing fixtures will see the highest price increases due to their reliance on imports.

However, it’s worth noting that this increase is moderate compared to the pandemic-era spike when material prices surged nearly 40%. With some categories, such as windows, doors, roofing, and cabinetry, showing negligible price impacts, there’s room to strategize and save.

Markets That Thrive Despite Challenges

The Midwest and Texas markets are weathering challenges better than most. For example, Chicago benefits from a unique mix of older homes (averaging 45 years old), significant wealth reserves in its population, and $350,000 in average home equity. If you’re in these regions, remodeling can still be a solid investment, particularly if you partner with experienced professionals who can guide you through the nuances of this market.

How to Navigate Remodeling Challenges

Despite economic pressures, remodeling remains a worthwhile endeavor when done thoughtfully. Here’s how to ensure your project runs smoothly and leads to long-term satisfaction and financial gains:

Work with Experienced Firms

Partner with a design-build firm that has an expansive local supplier network and strong financial stability. A firm with these capabilities can often purchase materials in advance, mitigating the impact of price fluctuations and reducing delays in appliance availability. Ask questions to understand how their experience and partnerships will benefit your project.

Be Decisive and Flexible

Quick decision-making is critical in the current environment. With lead times for materials often subject to delays, being prepared to pivot can help you stay on track. For instance, if custom cabinetry isn’t available in time, consider semi-custom options that maintain design integrity without sacrificing quality.

Prioritize Open Communication

Transparency with your remodeling partner is key. Work with a firm that openly discusses pricing risks, educates you on the material alternatives available, and offers flexible solutions to achieve your goals within your budget. This approach ensures you’ll stay informed and confident throughout the process.

Phase Your Projects

If budget constraints are a concern, prioritize projects based on their impact and ROI. A knowledgeable design-build partner can guide you in phasing your remodel, spreading out costs while maximizing your investment in strategically timed updates.

Remodeling ROI Math

Remodeling Projects with Strong ROI

Certain remodeling projects consistently deliver higher returns on investment, making them worthwhile considerations for homeowners looking to enhance their property value.

According to the 2025 Remodeling Impact Report by the National Association of Realtors and the National Association of the Remodeling Industry, some upgrades not only improve your home’s functionality but also provide substantial financial returns.

Here’s a breakdown of the projects most likely to boost your home’s value:

  • New steel front door: Offers a stunning 100% ROI, making it a simple yet impactful upgrade that enhances your home’s curb appeal and security.
  • Closet renovation: With an 83% ROI, reimagining and maximizing closet space is a practical way to add organization and value.
  • New windows (wood or vinyl): Delivering a 71–74% ROI, new windows improve energy efficiency, comfort, and aesthetics, appealing to modern buyers.
  • Basement conversion to living area: At a 71% ROI, converting unused basements into functional living spaces like family rooms or guest suites adds significant utility.
  • Attic conversion to living area: With a 67% ROI, turning your attic into a bedroom or office adds square footage and versatility to your home.
  • Complete kitchen renovation: A 60% ROI highlights the enduring appeal of a modern, updated kitchen, often seen as the heart of the home.
  • Bathroom addition: Adding an extra bathroom yields a 56% ROI and can solve common household bottlenecks, especially in multi-person homes.
  • New primary suite addition: At a 54% ROI, creating a luxurious master suite provides personal comfort while making your home more attractive to buyers.
  • Bathroom renovation: With a 50% ROI, refreshing an outdated bathroom can improve both usability and style, making it a popular choice for homeowners.

When selecting a project, it’s essential to consider your long-term goals. Are you planning to sell your home soon and want updates that will deliver quick resale value? Or are you more focused on personal enjoyment, comfort, and quality of life for your family?

For instance, while a steel front door or window upgrade is perfect for immediate ROI, a new primary suite might offer more personal satisfaction. Aligning your goals with the right remodeling projects ensures you’ll get the most out of your investment, whether you’re looking to sell or stay for years to come.

Areté: We Make Remodeling Work for You

The economic slowdown and rising material costs may seem daunting at first glance, but they don’t have to deter you from remodeling your home. With thoughtful planning, strategic decision-making, and an experienced design-build partner, you can transform your living space while protecting your financial investment.

Whether you want to enhance a historic home in Chicago, update your home for an aging family member, or boost resale value before putting your property on the market, now is the time to start exploring your remodeling options. Partner with our professionals. We will guide you to the right projects and materials, ensure smooth execution, and ultimately, help you create a home you’ll love for years to come.

Contact Areté today at 773.683.3033 and start turning your vision into reality. We’ll help you make informed decisions and achieve a home upgrade that’s worth every penny.