How Much Value Does Central Air Add to Your Home?

Newer homes keep it cool

In the U.S., air conditioners use about 6% of all electricity produced at an annual cost to homeowners of about $29 billion.

The Midwest and South regions had the highest percentages of households using AC, 92% and 93%, respectively. The lowest rate of households using AC was in the West, with 73%, the U.S. Energy Information Association (EIA) notes.

If you live in a home built within the last decade, you’re likely to have central air. Across the country, 93% of homes constructed between 2010 and 2020 used AC, while 83% of homes built before 1950 had cooling units. While the difference may not be sizable in most regions, you’ll see the significant contrast in the marine climate region: only 39% of homes constructed before 1950 had air cooling systems, while 66% of homes built between 2010 and 2020 used air conditioners.

Two identical houses: One with central AC, one without. Which one is worth more?

While installing a new central air conditioning system will increase your property value by 5 to 7%, our agents modify this a bit. They would price a home with central AC higher than one without, but the pricing depends on other market conditions.

For instance, Sophiea recently purchased a cabin that does not have central AC along Lake Cumberland, but it has ductwork for air conditioning, thanks to the sellers installing a heating system.

“There are places that don’t have air conditioning, but I think it’s more of a prerequisite.” He plans to spend about $5,000 to install AC at the cabin, which he equates to a $10,000 upgrade. “When you don’t have a system, you’re looking more for an investor who’s going to add it in, and you’re going to take a discount.”

If a 1,000-square-foot cabin sells for about $100,000 with central air, Sophiea says he’d list a similar-size cabin without AC for about $10,000 less because of the desirability.

By comparison, while multimillion-dollar homes in New Castle, New Hampshire, are expected to have central air, Whitney estimates that 60% of the new construction is under $500,000 in New Hampshire, and Maine doesn’t have it. He wouldn’t factor in a certain asking price for a home with central air conditioning without considering other features.

“You don’t know what the buyer wants,” he says. “If I’m a listing agent and you come through and say, ‘My buyer is not going to buy this because it doesn’t have central air,’ I’ll say, ‘Give me a contract, and tell me you want it. We’ll put [the AC] in. Let’s agree on the price.’”

How much will installing central air cost you?

The average cost nationwide to install central air conditioning is about $8,750. However, pricing varies by home size, the system’s energy efficiency, and your climate, among other factors. For example, you could pay $5,800 to $14,400 to install central AC in a 2,000-square-foot home.

Ductwork can be a challenge, depending on the age of your home and the architecture, Sophiea says. The average cost of installing or replacing ductwork alone is $1,367 to $5,967.

Nejad Eqal, owner of Service Express HVAC in Lexington, Kentucky, which has a Google Review rating of 4.9 out of 5 stars, says a home’s size and age significantly impact costs.

“People call all the time: ‘I’m looking at this house, and it needs air conditioning. I need to know what it’s going to cost’,” says Eqal, who works with Sophiea. “The larger the home, the larger the air conditioner you need, or making it one or two systems.” Older homes with little or no insulation either need insulation or a more powerful unit.

An installer also needs to know where to place the central cooling unit, such as outside the house, in an attic, or a crawlspace, Eqal says. An HVAC unit can be mounted on the roof of homes with limited ground space. Installation labor costs range from $75 to $250 per hour — the more difficult it is to access the cooling unit’s location, the more expensive the labor expenses are.

How to maximize your central AC upgrade

To estimate your possible installation cost, you’ll need to decide on the system type, capacity, energy efficiency, and brand. Here’s an overview of these factors.

Capacity

Air conditioning units measure their cooling capacity in tons. One ton is the amount of energy required to melt one ton of ice over 24 hours. (The term is left over from the days when ice was essential to refrigeration.) You might be more familiar with BTUs, or British Thermal Units, which in AC relates to the cooling output. A one-ton air conditioner might release 12,000 BTU per hour.

In general, you need about 20 to 60 BTUs per square foot of cooling, but this again varies by climate. A professional installer can help you calculate what capacity your home will need and which systems can best handle this.

Energy efficiency

Air conditioning systems also have efficiency measures that calculate how many watts the system uses. Residential systems carry a SEER, or Seasonal Energy Efficiency Ratio, specific to particular climates. SEER ranges from 13 to 24; the higher the rating, the lower the energy costs, but you’ll pay more for the initial system purchase.

A 16 SEER system might cost more than one with a lower SEER, but it could reduce your annual cooling costs because it’s more efficient. Many older AC systems have an 8 or 9 SEER rating, so even a 13 SEER system will be more energy-efficient, according to Trane, a leading HVAC manufacturer. Talk with a professional installer about any incentives such as rebates or tax credits at the state or federal level.

Also, don’t forget to ask about a high-efficiency filter, which reduces pollen and dust within your home and keeps the air conditioning equipment clean. Simply replacing a clogged, dirty filter can lower your air conditioner’s energy consumption by 5% to 15%, the U.S. Department of Energy says.

Experts recommend a filter with a minimum efficiency reporting value, or MERV, rating of 13 for residential HVAC systems, but ask an installer if your system can handle that. The higher the MERV rating, the lower the airflow, making the system work harder and use more energy. If your system can’t handle a MERV 13 filter, go with the next lowest rating.

Brand

Brands of air conditioners also vary in price depending on quality, features, and longevity. Eqal likes Rheem, which Fixr.com says costs about $3,650 to $6,450 for a three-ton unit. “We sell a lot of them. For the quality, the price is wonderful.”

Modernize, a privately owned lead-generation company that connects homeowners with contractors, compared units with 14 SEER ratings and recommended the following brands based on price, energy efficiency, and warranty:

• Carrier ($3,000 to $15,000 for installation costs)
• Trane ($4,600–$12,000)
• Lennox ($4,800–$10,800)
• American Standard ($3,500 to $6,500)
• Goodman ($2,765 to $5,340)
• Amana ($2,800–$3,600)
• HEIL ($2,290–$4,430)
• Rheem ($3,000–$6,500)
• York ($3,400–$6,000)
• Ruud ($3,000–$6,500)

Energy Star also compiled a list of its most energy-efficient air conditioners in 2024, which includes various information, such as cooling capacity and annual energy use.

Is central AC truly an upgrade?

Bear in mind: Whatever you spend to install central AC won’t boost your value or asking price dollar for dollar. The typical life of an AC system is 10 to 15 years, and many buyers look at the age of the system instead of the name brand, Sophiea says.

“People always think that when they add a new system, ‘Oh, I just spent $7,000,’ but that’s not considered an upgrade. That’s considered ‘maintenance,’ or ‘the price of homeownership,’” he says. “It adds no value to the property. It helps with the salability of the property and with any issues that may come up on the inspection.”

If you live in an area that’s not particularly humid, a combination of options might keep your home cool without the expense of installing a central air conditioning system. The tips below can reduce home energy use:

• Install ceiling fans
• Install a whole-house fan
• Install an evaporative cooler, also known as a “swamp cooler” (which uses about 1/10 the energy of central AC)
• Seal and insulate ductwork
• Increase attic insulation
• Install a programmable thermostat

FAQ: Finding your chill zone

Unsure about whether to replace or install a central air conditioning system? The answers to these common questions should help.

My AC system is old but works well. Should I replace it?

An older unit can be up to 50% less efficient than a newer model and might use R-22 refrigerant, which is more damaging to the ozone layer, according to US News & World Report. The government is phasing out R-22 for R410a, which also is more efficient.

If your system has a low SEER rating, or if your repair costs multiplied by the unit’s age equal more than $5,000, you’re better off with a new unit. This will save you money on energy and repair costs. Plus, newer technology, such as a smart thermostat or whole-house humidifier, can help keep you comfortably cool.

How can I save money on a central AC installation?

Besides tax credits and rebates, shop in the spring and the fall, when temperatures are milder and the need for that blast of cold air is less urgent. Some contractors will advertise promotions during these seasons or offer an off-season discount. Get quotes from several contractors, too, to find the best deal.

How do I keep my AC system running smoothly?

Hire a licensed professional annually to change all filters, vacuum the blower compartments, drain the pan and drainage system, and clean and flush the coils. Beyond that, keep plants and hedges at least two feet away from the outside unit to avoid clogging debris.

Every month, clear any dirt and debris from the condenser coils. Clean the filters and grills and check for drain pipe blockages. Also, seal or insulate ducts so that precious cool air doesn’t escape.

Bottom line: How much value does central air add to your home?

When deciding how much value central air adds to your home, our experts advise weighing the enjoyment you’ll get out of the result as well as the expense. If you live in an area where central AC isn’t as prevalent or you don’t want to tinker with an older home, the value may be negligible.

Whitney likens it to installing a swimming pool. “You can always put it in, but you can never take it back. Why would you pay for something when you don’t even know if you need it?” he says. Some buyers won’t care, “so why would you spend the money if it’s not going to make a difference?”

Expert advice from a real estate agent who knows the local market well can help you decide whether a new central air conditioning is worth it. Find the best realtors in your area and make informed decisions on home upgrades.

Header Image Source: (C5 Media / Shutterstock)