Homeowners know that the next home renovation project is always right around the corner. And that means finding ways to finance such undertakings. When planning for renovations, the average homeowner underestimates their project cost by approximately 22 percent, according to the 2026 Remodeling Impact Report. Establishing a pre-project budget can help avoid such surprises.
Don’t Over-Improve A common mistake homeowners make is over-improving a home beyond the neighborhood value. A good rule of thumb is to employ the average percentage- of-home-value approach in an effort to stay within range of what’s acceptable. Budget a kitchen renovation or finished basement at 10 to 15 percent of the home value. A master bedroom will come in at 5 to 10 percent of home value, while a small bedroom or office falls between 1 and 3 percent of home value. These benchmarks are supported by the National Association of the Remodeling Industry and the National Association of Realtors. Historically, a functional, modern kitchen is the top driver of home value, says Remodeling Magazine.
