Replacement windows can add real value to your home, and this type of home improvement project has a compelling ROI.

In fact according to ISoldMyHouse.com, window replacement projects are among the best projects homeowners can do; the site estimates 85 percent of the costs can be recouped instantly in added home value.

But just how much do they add?

According to estimates from Remodeling magazine’s 2016 Cost vs. Value report, vinyl replacement windows added $10,794 to a home’s value in the U.S., while wood windows added about $13,050.

Ultimately, though, the increase in resale value depends on your neighborhood, the real estate market in your region, and the average costs of the home improvement project.

Determining ROI of Your Window Replacement Project

The Cost vs. Value report is a valuable resource that can help you estimate the average project cost for your region, as well as the increase in resale value the project can potentially create.

The report made a few key findings that suggest the ROI of window replacement projects will rise in 2017. First, the cost-to-value ratio of major improvement investments like windows is increasing. One reason: The real estate market is healthy in many locations throughout the U.S., and remodeling values are closely tied to the real estate market. When the market is good, home improvement projects tend to have a higher ROI.

Second, replacement projects have historically offered a greater return compared to remodels. In fact, since 2003, the Cost vs. Value report has shown a greater ROI for replacements compared to remodeling. That trend continued in 2017.

For example, a major kitchen remodel costs, on average, about $120,000 in 2016. But this type of project returned only an estimated 61 percent of costs or $73,000. Bath remodels generated an even worse return. In 2016, major bath remodels cost an average of $57,000 but returned just over 50 percent or about $32,000.

Simply put, window replacement projects can add substantial value to your home.

Replacement Windows and Increase in Resale Value in 2017

In 2016, window replacement projects generated one of the best ROIs of any major remodel investment. This includes projects like kitchen remodels and bathroom additions.  On average in 2016, vinyl window replacements recouped 73.3 percent of the average $14,725 project cost upfront in added home value, while wood replacement windows returned 72.1 percent of the $18,087 project.

Ultimately, the state of regional markets and the average cost of window replacement projects affect the ROI. For example, the South Atlantic region – which extends from Baltimore, MD to Miami, FL – offered an above average ROI for window replacement projects.

Wood replacement windows added $13,514 in resale value in 2016, or 77 percent of initial costs, and vinyl replacement windows added $10,614, or 74.3 percent. Both figures bested the national averages.

The neighborhood is also a determining factor in resale values, and this is especially for the value-add of remodeling projects. In older neighborhoods, windows can make a home dramatically stand-out. Therefore, if Home A and Home B look somewhat similar in terms of structure, but Home B has new windows, the listing agent has a compelling reason to increase the listing price as it looks nicer on the outside.   

With new windows, homeowners can break even over a period of about 5 years. How? New windows improve home efficiency, which helps to cut heating and cooling costs. These reduced costs – which can total as much as $465 per year in some climates – can help you recoup the entire cost.

Window replacement projects are major investments, but they offer a compelling ROI to homeowners. Initially, these projects generate about an 80 percent return, while increasing ROI year-over-year as they help to reduce heating and cooling costs. In 2016, the average ROI of window replacement project grew, and as the real estate market improves, the ROI of window replacements will likely continue to grow.

Bio

Matt Davis is a Writer for WeatherMaster Windows. WeatherMaster has been providing quality residential windows to Maryland, Washington D.C., and Virginia since 1986.