Are you considering renovating your kitchen?
Well, according to Zillow Talk: The New Rules of Real Estate, “Kitchen renovations, at any level, offer among the lowest return on investment of home improvements studied.”
Yes, you read that correctly.
For a mid-range kitchen remodel, the typical family invests $5,400. Meanwhile, a major upscale kitchen renovation can cost as high as $50,000. Yet both upscale and mid-range kitchen renovations recover only about half the cost invested.
That means every dollar invested on a new kitchen only increases the value of your home by 50 cents! That is not always the case, but according to Zillow Talk it’s the most common.
So if you’re planning any kitchen renovation in the near future, the most important consideration is the functionality you want to achieve — not the value you’re trying to create. Also, if you are considering putting in a new pool, beware, it’s much worse on average than a kitchen remodel.
This past week we saw mortgage bonds move lower in response to the Fed’s announcement to leave its benchmark Federal Funds Rate alone.
This rate has been near zero for the last eight years in an attempt to help stimulate the economy. This is something we want to keep a watchful eye on. If upcoming economic reports are strong, such as Friday’s October Jobs Report, the Fed could decide to raise the Fed Funds Rate at its December meeting.
The key takeaway if the Fed Funds Rate does rise is that home mortgage rates will likely follow suit, depending on other market conditions.
The bright side for now is that home loan rates remain near historic lows, making now a great time to consider a home purchase or the refinance you’ve put off.