Installing a heat pump could boost your home's resale value, with homeowners potentially recouping up to a quarter of the installation cost by highlighting the feature in real estate listings, according to a new report.
The analysis, a collaboration between the nonprofit Smart Energy Consumer Collaborative, customer-intelligence platform 257, and the National Association of Realtors, examined over half a million US home sales featuring ducted heat pumps. It found that homes mentioning a heat pump in their listings saw a price increase of 0.6 percent to 1 percent compared to similar homes without the feature advertised. This translates to an average gain of $2,300 to $3,900 on a median home sale price of $399,000.
While environmental benefits are a draw for some, economics often drives purchasing decisions. Scott Rosenberg, CEO of 257, noted that homeowners invest in upgrades like kitchens and bathrooms expecting a return, and heat pumps are no different. The study suggests that even this seemingly modest price lift can significantly offset the initial investment, which averages around $15,400 for a ducted system, compared to about half that for a traditional gas furnace and central AC combo.
The research employed machine learning to identify nearly identical homes, then compared sales prices based on whether the heat pump was mentioned in the listing. This approach aims to isolate the impact of advertising the appliance. Professor Yueming "Lucy" Qiu of the University of Maryland, who has conducted previous research on heat pump premiums, called the report "very valuable" for quantifying buyer interest.
Qiu's earlier study, published in Nature Energy, used a different methodology, analyzing homes sold both before and after a heat pump installation. That research indicated a larger premium of 4 percent to 7 percent, or $10,400 to $17,000, on average home prices. The difference highlights the distinct questions each study addressed: Qiu's focused on the inherent value of a heat pump, while the latest report examined the impact of explicitly marketing it.
The National Association of Realtors reports that homebuyers are increasingly inquiring about energy-efficient upgrades for both environmental reasons and to manage utility costs. However, many real estate agents lack confidence in explaining the benefits of such features, with heat pumps being mentioned in listings only about 8 percent of the time. Rosenberg believes that increased agent awareness and promotion of heat pumps could create a positive feedback loop, further signaling their value to buyers.
