Home Improvement CO2 Karma

Not every eco-friendly “home improvement” adds value to your home. Find out which renovations matter most.

How you decide where to spend your renovation dollars depends on your priorities, such as reducing your carbon footprint, improving your home value, or adding the features that make your home more functional and personal. Ideally, a home improvement meets all three of those goals.

Calculating the environmental impact and the effect on your home value can be challenging, but generally, sustainability is a priority for homeowners. That means that choosing eco-friendly upgrades is more likely to appeal to other homeowners, which in turn may raise your home value.

According to Houzz research , the vast majority of homeowners incorporate sustainable features during kitchen and bathroom renovations (92% and 87%, respectively). 

The 2023 U.S. Houzz Kitchen Trends Report shows that popular products include:

  • LED bulbs (65%)
  • Energy-efficient appliances (61%)
  • Water-efficient fixtures (34%) 
  • Energy-efficient windows (27%)

Plus, nearly half of homeowners (47%) opt for a timeless design as a sustainable choice during renovations. While the most frequently cited reason for incorporating sustainable options is long-run cost-effectiveness (74%), making environmentally friendly choices is also top of mind for more than half of renovating homeowners (54%).

"We’re seeing a growing interest in sustainable upgrades that support the health of our environment,” says Anne Colby, U.S. editor for Houzz. “Architects on Houzz have noted that improvements related to insulation, heat pumps, solar panels, car-charging equipment, natural ventilation, air filtering and greywater systems are on the uptick.”

Homeowners are also prioritizing sustainability for their decorative home improvements, which supports the idea that renovations incorporating environmentally friendly upgrades may add value to a home.

“Designers have also noted that homeowners are increasingly making more eco-conscious decisions when it comes to interior furnishings and decor, choosing natural, eco-friendly fabrics and even secondhand furniture and décor,” Colby says. “Houzz research suggests that while environmental friendliness is top of mind for homeowners, sustainable design is largely being prioritized for its cost effectiveness in the long run."

Home Improvements that Pay–or Not

The gap between eco-conscious remodeling projects and less environmentally friendly upgrades is clear in the 36th annual Remodeling 2023 Cost vs. Value Report published by Zonda Media. The project with the highest return on investment (103.5%) in the report is a heating, ventilation, and air conditioning (HVAC) electrification conversion, which is also an extremely popular renovation. In other words, heat pumps are hot.

Heat Pump Installation adobe stock

“Heat pump technology has evolved,” wrote Clayton DeKorne, chief editor of Zonda’s Journal of Light Construction (JLC) Group in a statement with the report. “So this conversion makes sense for the first time in all climate zones. Combined with the high gas and oil prices that we have seen over the last year, it’s reasonable to see this project come out on top.”

Far lower on the list in terms of return on investment are an upscale primary suite addition (22.7%) and an upscale bathroom addition (26.6%). While typically expanding the square footage of a house is thought to add value, the report’s authors wrote that “adding square footage may solve immediate space needs, but it also adds to maintenance costs and it increases heating and cooling bills, something that may not be welcomed in this era of heightened energy awareness.”

Opting to create a bigger bedroom out of two smaller spaces won’t increase your square footage and could hurt your home value. Typically homes sell for more money when they have more bedrooms, according to Realtor.com .

On the other hand, upgrading an existing bathroom with a midrange remodel generates a return of 66.7%, according to the Cost vs. Return report. A bathroom remodel offers the potential to choose eco-friendly upgrades. The most popular sustainable choices found in the 2023 U.S. Houzz Bathroom Trends Report include LED light bulbs (62%), water-efficient fixtures (46%), a timeless design (44%), energy-efficient features (34%) and light dimmers (34%).

Adding a deck may add to your enjoyment of your home, but it won’t do much to reduce your carbon footprint or help your resale value. You’ll recoup just 39.8% of the money you spent according to the Cost Vs. Value Report.

Upgrading your siding generates a return of 88.5% to 94.7%, and replacing your roof offers a return on investment of 48.9% to 61.1% depending on the material you choose, according to the Cost vs. Value Report. In both cases, you can also improve your home’s energy efficiency with additional insulation that’s inexpensive and simple to install during these upgrades.

According to some estimates, a swimming pool can add as much as 3% to 7% to your home’s value. But that figure comes with a lot of caveats. A pool can require a significant amount of power for heat and chemicals to keep it clean. Generally, the costs to install a pool ($45,000 to as much as $100,000), maintain it ($500 to $4,000 annually and as much as $10,000 annually if you heat it) are unlikely to be recouped in your home’s sales price. 

Your homeowner’s insurance premiums typically rise, too, when you have a swimming pool. Hot tubs , which increase your electric bill by an average of $20 to $40 per month, are not considered an asset when selling your house.

Sustainable Features that Sell

To match your priority for sustainability and resale value, consider upgrading your heating and air conditioning system to a heat pump. Not only does that generate the top return on investment, but it can help you sell your home faster when you’re ready to move, according to Zillow research.

Zillow looked at 271 features and design terms mentioned in listing descriptions across nearly 2 million home sales in 2022. While there are many factors that contribute to a home selling faster or for more than expected, these features reflect what today's buyers are looking for in a home, says Amanda Pendleton, Zillow’s home trends expert.

“One clear takeaway is that buyers love heat pumps,” Pendleton says. “Homes with ‘heat pump’ in their listing description sold three full days faster than expected, controlling for other variables. That makes it a top-five feature for shortening a house’s time on market. Walkability was key, too–a reduced need for car trips shortened a home’s time on market by 2.4 days.”

Generally, listings that included terms like “sustainable,” “green,” “eco,” or “energy efficient” sold one day faster than those that didn’t include those phrases. Remodeling with energy efficient appliances and including that in your listing when you sell can generate interest among buyers.

“Just looking at which features show up in listing descriptions can help shed light on early trends in the marketplace – what buyers are gravitating toward and what savvy sellers are highlighting,” Pendleton says. “The term ‘carbon neutral’ was among the top 10 features that grew the most in popularity – rising 72% from the first half of 2022 to the first half of 2023.”

Programmable thermostats are showing up more often as well, with mentions rising 43% in the same period, while charging stations for electric vehicles rose 19%. These features are all relatively rare to see, Pendleton says, but they’re gaining momentum.

Whether that translates into added value or a quicker sale remains to be seen. The most frequently cited reasons for making sustainable choices are cost-effectiveness in the long run (69%) and environmental friendliness (54%), according to Houzz.

“We know energy-efficient and eco-friendly features are important to today’s buyers, particularly younger buyers,” Pendleton says. “However, in this environment of high prices and mortgage rates, buyers’ budgets come first. They are more likely to prioritize other features like square footage, outdoor space and the right number of bedrooms and bathrooms. Energy-saving upgrades have to pencil out long-term if buyers are going to pay more for them in their purchase.”