The home renovation wave shows no signs of slowing down, as Americans continue to invest billions each year in projects meant to refresh and improve their living spaces. But while ambitious kitchen remodels and spa-inspired bathrooms dominate design magazines, new research suggests that smaller, more practical updates may offer the best payoff when it comes time to sell.

According to the 2025 Remodeling Impact Report, released by the National Association of REALTORS® and the National Association of the Remodeling Industry, some of the most cost-effective projects are also the simplest. Replacing an entry door with steel, for instance, was found to recoup its entire cost at resale. Closet makeovers, new fiberglass doors, and updated vinyl windows also ranked high in cost recovery, often outperforming major renovations in terms of return on investment.

That doesn't mean homeowners should ignore larger undertakings. Kitchen and bathroom projects remain important for buyers, but they rarely recoup more than 60% of their cost. Still, they can help make a property more attractive and move-in ready, especially in a market where nearly half of buyers say they are unwilling to compromise on condition.

The report also highlights a different dimension of remodeling: happiness. Projects were assigned a "joy score," based on homeowner surveys. While cost recovery measures how much money you may get back at resale, the joy score reflects the personal satisfaction owners gain after a remodel. This distinction matters, as many households plan to stay in their homes for several years before selling, giving them time to enjoy their new spaces.

Real estate professionals are playing a larger role in these decisions. With 43% of homeowners reporting stress over repairs and renovations, agents are increasingly guiding clients toward upgrades that balance value with livability. Painting, either a single room or the entire home, and replacing the roof if necessary were among the most frequently recommended projects. These improvements can help a property stand out without overcapitalizing in ways that fail to pay off at closing.

Motivations for remodeling vary widely. Some owners simply want to refresh outdated finishes, while others aim to improve energy efficiency or adapt their homes to lifestyle changes. Rising home equity has also fueled demand, giving households more financial flexibility to take on both small and large projects. For those planning to sell in the near future, the Remodeling Impact Report offers a helpful guide to prioritize the kinds of improvements most likely to boost resale value.

Overall, the study underscores the balancing act between personal enjoyment and financial return. While a new suite of stainless steel appliances or a custom bathroom may not return every dollar spent, they may still provide satisfaction and make a home more appealing in a competitive market. On the other hand, projects like new doors, windows, or fresh paint can deliver both a strong return and broad buyer appeal.

For homeowners, the takeaway is clear: remodeling doesn't always have to be large-scale to make a meaningful difference. Whether preparing to list a home or simply seeking to enjoy it more fully, carefully chosen updates can add lasting value, both financially and emotionally.

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The housing market is showing the first signs of relief in months as mortgage rates ease and monthly payments dip to their lowest level since early 2025. But while affordability is improving on paper, many buyers remain cautious, holding out for further declines before making their move.

The average 30-year fixed mortgage rate slipped to 6.58%, according to Redfin, the lowest reading in 10 months. That drop has pulled the median U.S. monthly mortgage payment down to $2,616, its most affordable level since January.

Lower borrowing costs are beginning to stir demand. Pending home sales rose 1.6% year-over-year in the four weeks ending August 27, marking the second consecutive month of growth after a sluggish start to 2025. Redfin's Homebuyer Demand Index is up 3% from last month, and home tour activity is running ahead of last year's pace.

"Buyers are circling," said Ali Mafi, a Redfin Premier agent in San Francisco. "Some are moving forward because sellers are more willing to negotiate, but others are waiting for mortgage rates to drop further. If rates fall sharply, competition will return quickly."

That hesitation is still evident. Redfin agents in markets such as Seattle and Nashville reported little to no bump in demand over the past weekend. Many would-be buyers are waiting to see if the Federal Reserve cuts interest rates in September, though Redfin economists caution that current mortgage rates likely already factor in that expectation.

On the supply side, new listings increased 1.9% year-over-year, the largest jump in more than two months. After holding back amid weak demand, some sellers appear ready to re-engage now that rates are easing and buyers are cautiously returning.

With mortgage payments at their most affordable point this year and signs of life in both buyer and seller activity, the housing market could be at a turning point. The question now is whether buyers will step off the sidelines in greater numbers—or continue to wait for rates to fall further.

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For the first time in nearly a year, mortgage rates have dipped to their lowest point, sparking cautious optimism among homebuyers and real estate professionals alike.

According to Redfin, the average 30-year fixed mortgage rate dropped to 6.58% this week, the lowest since last October. The median mortgage payment has also fallen to $2,616, its most affordable level since early 2025.

The drop has nudged some buyers off the sidelines. Pending home sales rose 1.6% year-over-year in the four weeks ending August 27. Still, many remain cautious.

"House hunters are feeling more confident about buying a home now that mortgage rates have started to decline," said Ali Mafi, a Redfin Premier agent in San Francisco. "Some are making offers now, though others are sitting tight, betting that rates will fall further. I'm telling buyers to act now because it's still a buyer's market and most sellers are willing to negotiate. If rates do plummet, the market will get competitive."

By the numbers, sellers currently outpace buyers significantly: there were 36.3% more sellers than buyers last month, the widest gap since 2013. That imbalance has now persisted for 15 consecutive months, giving buyers extra leverage in negotiations.

While mortgage rates have eased, uncertainty remains about how much further they could drop. The Federal Reserve is widely expected to cut interest rates at its September meeting, which could influence borrowing costs.

But buyers shouldn't expect a one-to-one impact, warns Jeffrey Roach, chief economist at LPL Financial. "Fed policy is not one-for-one on the retail mortgage market," Roach explained. "There are other things going on besides that. However, I think it is helpful to know that the directional pressure is positive. It's in the right direction for mortgage rates."

Roach added that he expects mortgage rates will be lower than current levels by early 2026.

What Buyers Should Weigh

Now: Rates are at a 10-month low, inventory is high, and sellers are motivated. Buyers willing to act quickly could secure favorable terms before competition heats back up.

Later: A Fed rate cut may apply further downward pressure, meaning rates could ease more in the coming months. Patience could pay off — though a rush of buyers could erase today's negotiating power.

With affordability improving and market conditions tilted toward buyers, now may be an opportune time to purchase for those financially ready. However, with a potential rate cut looming and the possibility of further declines ahead, the decision ultimately depends on how much risk — and patience — buyers are willing to take on.

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Smart Strategies for Buying a Home in Today’s Market

Mortgage rates have cooled slightly from their 7% peak earlier this year, but affordability remains a challenge. With average home prices still hovering above half a million dollars, the dream of homeownership can feel out of reach. Yet financial planners say buyers still have options — if they approach the market with strategy, discipline, and flexibility.

Here are the top ways experts suggest navigating the current housing climate without stretching your finances too thin.

Think Beyond the Traditional 30-Year Fixed

Some buyers are considering temporary rate buydowns or adjustable-rate mortgages (ARMs) to reduce payments in the early years. "These products can ease the burden if you put 20% down and have a plan for rate adjustments in the future," says Elaine King, CFP.

Buy What You Need, Not What Impresses

Instead of chasing the biggest house, focus on affordability and practicality. "The smallest home in the best neighborhood is often a smarter investment," notes Catherine Valega, CFP. A smaller footprint reduces expenses while still allowing you to build equity.

Preparation Is Power

Before even browsing listings, get fully preapproved. "Preapproval tells you exactly how much you can afford — and shows sellers you're serious," explains Jay Spector, CFP. It can also give you an edge in competitive bidding situations.

Balance Finances and Feelings

A home is both an investment and a place to live. Mary Ann Sullivan, CFP, advises buyers to choose a property they'll be happy in long-term, even through economic downturns. "If you love the home, you'll be more patient with market cycles," she says.

Negotiate Smarter

Creative negotiation is becoming a buyer's best tool. Experts recommend asking sellers with stale listings for concessions, or timing purchases during slower seasons like late fall. Other strategies include using the same attorney to lower closing costs, offering cash if possible, or considering loan assumption from the seller.

Know Your Limits

Several advisers emphasized the importance of budget discipline:

• Keep housing costs under 30% of household income.
• Stress-test your budget by saving the difference between your rent and a potential mortgage payment.
• Cap your monthly payment — including insurance, taxes, and utilities — before you shop.

"Too many people buy more house than they can handle and sacrifice long-term savings," warns Patrick Sabol, CFP.

Do Your Homework

Study neighborhoods, recent sales, and price histories before making an offer. "The longer a home has been listed, the more likely a seller will negotiate," says Don Grant, CFP. Partnering with a skilled agent who knows the local market can also uncover hidden opportunities.

Focus on What Lasts

While finishes can be updated, location and structure matter most, says Autumn Knutson, CFP. Choosing a home with good bones in a strong neighborhood creates flexibility to renovate or personalize later.

Buying a home in today's market requires clear-eyed planning and a willingness to adjust expectations. That may mean opting for a smaller home, exploring alternative financing, or waiting until the numbers align with your long-term goals.

As financial planner Chelsea Ransom-Cooper puts it: "Test your budget, do your research, and know your priorities. Homeownership is valuable, but only if it doesn't jeopardize your overall financial health."

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