The Smartest Home Renovations Are the Least Visible

"Homeowners are spending more than they did last year on renovations. But trophies of the housing boom—granite countertops, bamboo floors—have been supplanted by utilitarian improvements such as insulation.

During the boom, homeowners often were rewarded for big kitchen expansions and splurges like master-suite additions with custom vanities and enough shower heads to wash a car.

But these days, many additions and improvements are bringing lower returns that they once did. Blame lower demand for trade-up housing, a glut of new homes and tight financing. And stiffer home-appraisal rules mean fewer banks will lend extra to buy or remodel homes with features that are out of line with comparable properties nearby.

Now, in the slower housing market, the best projects save owners money on energy and maintenance expenses. Or they modestly increase usable space, such as an attic bedroom or an additional bath, if the house had fewer than others in the neighborhood, appraisers say."

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