Home Resale Value: Does Your Furnace Type Matter?

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When it comes time to sell your home, buyers care about more than square footage and countertops — your heating system can be a make-or-break feature. But does the type of furnace you have (gas or electric) really impact resale value?

The short answer: Yes, but it depends on your region, system condition, and buyer expectations. In this guide, we’ll explore how gas and electric furnaces influence buyer perception, marketability, and even final sale price.

Why HVAC Systems Are a Selling Point in Today’s Market

Heating and cooling aren’t just comfort features — they’re major mechanical systems, and savvy buyers want them up-to-date and energy-efficient. A 2023 survey by the National Association of Realtors found that energy-efficient systems and low utility bills ranked among the top five features buyers are willing to pay more for.

Furnace Type Signals Long-Term Costs

A modern gas furnace with a high AFUE (Annual Fuel Utilization Efficiency) rating? That tells buyers they can expect lower heating bills.
An older electric furnace with no efficiency label? That could raise red flags — or at least invite some negotiation.

Even if the furnace works fine, its fuel source, age, and efficiency rating can affect a buyer’s confidence in the home.

What Real Estate Agents Say About Heating Systems

Common Buyer Questions

When walking through a home, prospective buyers (or their inspectors) will often ask:

“How old is the furnace?”
“What type of system does it use — gas, electric, or heat pump?”
“Has it been serviced recently?”
“Will I need to replace it soon?”

These questions stem from a practical concern: home heating is expensive, and no one wants to inherit a problem.

Gas vs. Electric Perceptions

Gas Furnaces are generally seen as cost-effective and reliable, especially in colder regions where electric systems might struggle.
Electric Furnaces, on the other hand, are viewed as cleaner, simpler to maintain, and better suited for mild climates — but they may raise cost concerns in areas with high electricity rates.

Buyers also pay attention to the overall readiness and appeal of a home’s major systems. According to Zillow, well-maintained, upgraded features — including mechanical systems — can make a home sell faster by boosting buyer confidence and reducing perceived future expenses.

Regional Preferences: Gas vs. Electric by Market

Your location heavily influences how furnace type is perceived. What’s standard in one area may be a drawback in another.

Cold Climates: Gas is King

In regions like the Midwest or Northeast, gas is often favored for its lower operational cost and performance in freezing temps. An all-electric furnace in Minnesota might make a buyer hesitate — unless it's paired with a high-efficiency cold climate heat pump and strong insulation.

Mild Climates: Electric is Common (and Often Preferred)

In the Southeast, parts of the West Coast, and Canada’s milder provinces, electric heating is the norm. Buyers in these areas may actually prefer all-electric homes due to their lower carbon footprint and simplicity — especially as local utilities move toward cleaner grids.

According to EIA data, 36% of U.S. homes use electric heating, with regional usage patterns closely tied to climate and electricity cost.

Local Policy Plays a Role

Some cities (like Berkeley, CA and NYC) are now limiting or banning natural gas hookups in new construction — a trend that could shift buyer preferences even more toward electric systems in urban centers.

Furnace Efficiency Ratings and Buyer Perception

Whether it’s gas or electric, buyers want efficient systems.

A 95% AFUE gas furnace with ENERGY STAR® certification is a confidence-booster.
An electric furnace with variable-speed or dual-stage heating can be just as appealing — especially if paired with low-emission or renewable electricity sources.

Smart thermostats and documented maintenance also help. According to Total Home Supply, HVAC improvements like high-efficiency systems and smart controls can make a home more attractive to buyers and boost resale potential, especially in competitive markets.

Appraisal Considerations: Does It Add to Home Value?

Here’s the nuance: upgrading your furnace won’t always directly increase your home’s appraised value, but it can boost buyer appeal, which affects:

Time on market
Buyer confidence
Likelihood of offers near asking price

According to the EPA, a well-designed and maintained HVAC system is essential to indoor air quality and occupant comfort — two factors that heavily influence buyer perception, even if they don’t stand out like a kitchen remodel.

On the flip side, an aging or inefficient furnace could cause buyers to lower their offer to budget for future replacement.

Should You Replace Your Furnace Before Listing?

Not always — but it depends on a few key factors:

Replace If:

Your system is 15+ years old
It makes noticeable noise, struggles to heat evenly, or has visible rust/damage
Your home is in a region where buyers strongly prefer one furnace type over the other

Keep and Market It If:

Your system is under 10 years old, well-maintained, and energy-efficient
You’ve recently had it serviced and cleaned
It works well for your region and utility rates

If you're not ready for a full replacement, you can still boost appeal with smaller upgrades:

Add a smart thermostat
Provide recent maintenance records
Seal ducts and upgrade insulation
Clean or replace filters and grilles before showings

Final Verdict: Does Furnace Type Impact Resale?

In many cases — yes. Here’s how:

Buyers notice your heating system, especially in climates where it’s used heavily
The wrong type for your region can raise concerns or reduce offers
A well-maintained, efficient system can set your listing apart

Ultimately, it’s not just about gas vs. electric. It’s about: