Labor Day Home Improvement Projects That Pay

DENVER--(BUSINESS WIRE)--Labor Day can conjure images of relaxation, but for nearly 20 percent of U.S. homeowners, the three-day weekend means an opportunity to tackle a home improvement project, according to a survey released today by Opinion Research Corporation and Johns Manville (JM), a building and specialty products manufacturer.

The survey of 726 homeowners showed that the most popular projects planned for the Labor Day weekend include painting a room (61 percent) and landscaping (58 percent), followed by kitchen upgrade (32 percent), bathroom upgrade (30 percent) and adding attic insulation (14 percent).

But do many homeowners consider the financial return their efforts could provide before beginning a home improvement project? And do homeowners recognize the different types of paybacks associated with home improvement projects? The answer, the survey suggests, is not always.

A minority of homeowners, just 42 percent, said they consider the return on investment (ROI) before tackling a home improvement project. Just 11 percent of responding homeowners said that ROI is the most important factor when choosing a project.

The survey’s other key findings included:

• 46 percent of homeowners in metropolitan areas consider a project’s ROI, compared to 31 percent of homeowners in rural areas
• 47 percent of homeowners in the West consider ROI before starting a home improvement project, the most of any region
• 72 percent of homeowners between age 18 and 25 consider a project’s ROI, the most of any age group
• 23 percent of homeowners above age 65 consider a project’s ROI, the least of any age group
• 14 percent of homeowners planning a home improvement project intended to add attic insulation

“The fact that only 14 percent of American homeowners are planning to add insulation to their attic is not surprising. That finding accurately reflects the fact that 46 million homes in the U.S. are currently under insulated and not as energy efficient as they could or should be,” said Dean Johnson, host of the PBS “Hometime” television show and recognized home improvement expert. “Insulation usually takes a back seat to more aesthetic projects such as landscaping and kitchen upgrades. These projects will pay homeowners back when they sell their home, but insulation is one of the upgrades that will allow homeowners to realize an immediate payback in reduced heating and cooling costs.”

The survey also showed that some homeowners had trouble differentiating between projects that provide an immediate payback and one that only provides a return when it comes time to sell the home.

For instance, more than half of respondents, 54 percent, felt that a kitchen upgrade offered the quickest return, followed by landscaping, at 17 percent. Adding attic insulation or a bathroom upgrade came next, both at 8 percent, followed by painting a room, at 7 percent.

However, home improvement projects such as upgrading a kitchen typically generate a return only when the home is sold. By comparison, homeowners can begin to immediately recoup the costs of adding attic insulation, installing double-pane windows, or caulking and sealing because such projects lower monthly heating and cooling costs through increased energy efficiency.

In addition to the immediate return from reduced energy costs, insulation also increases a home’s market value. Data from the Appraisal Institute shows that for every dollar saved in annual utility costs, homeowners can expect to add about $20 to the market value of their home. For example, a homeowner that saves $300 on annual heating and cooling costs by properly insulating could add $6,000 to the market value of their home.

“In addition to energy bill savings, adding insulation makes homes more comfortable by eliminating drafts and hot spots,” said Bapi DasGupta, director of building science for Johns Manville. “Upgrading insulation is also good for the environment because a well-insulated home needs less energy to heat and cool, which reduces the amount of greenhouse gasses emitted into the atmosphere. As homeowners tighten up their homes and add insulation to improve energy efficiency, they should consider using JM’s Formaldehyde-free™ product to avoid trapping formaldehyde in the air of more tightly sealed homes, which can lead to poor indoor air quality.”

The U.S. Department of Energy estimates that 40 percent of all air leaks in the average home are in the attic, and homeowners can expect to see up to a 30 percent savings on heating and cooling costs with a well-insulated and air-sealed home. The Harvard University School of Public Health estimates that 65 percent of U.S. homes are under insulated.

“If homeowners are interested in a quick, simple and financially smart home improvement project, they should consider adding insulation to their attic,” DasGupta said. “Not only does insulation provide an immediate return by lowering heating and cooling costs, but there is also a tax incentive for adding insulation. If homeowners act by the end of the year, they can still take advantage of the federal tax credit for energy efficient home improvements, which could be worth up to $500.”

The Energy Policy Act of 2005 allows for a tax credit of up to 10 percent of the cost of materials for certain home improvements, such as installing Energy Star-qualified windows and air conditioners, or installing insulation and air sealing products. The act, which offers a tax credit of up to $500 per household, was created in response to record high energy prices.

“A simple way for homeowners to check if their home is properly insulated is to measure the amount of insulation in their attic,” added Johnson. “By using a ruler, homeowners can check the depth of their attic insulation. Many climates may need up to 19 inches of attic insulation to ensure maximum energy efficiency.”

About Johns Manville

Johns Manville, a Berkshire Hathaway company, is a leading manufacturer and marketer of premium-quality building and specialty products. In business since 1858, the Denver-based company has sales in excess of $2 billion and holds leadership positions in all of the key markets that it serves. Johns Manville employs about 8,500 people and operates 43 manufacturing facilities in North America, Europe and China. Additional information can be found at www.jmhomeinsulation.com.

About the Survey

The 2006 Home Improvement Return On Investment survey was conducted by Opinion Research Corporation for building products manufacturer Johns Manville. The survey was conducted via telephone on August 4, 2007 and contacted 1,040 U.S. adults 18 years of age and older, living in private households in the continental United States. Using Opinion Research’s CARAVAN methodology, the data was collected from a national probability telephone sample, a form of random-digit-dialing (RDD). Respondents were asked six questions regarding beliefs and attitudes about return on investment for home improvement projects.