2) Will the addition add value to your home? Even if you have no plans to sell anytime soon, you (or your family) will sell someday—and you might also refinance or take out a home equity line of credit, for which you'll want the best possible appraisal of your home. So always consider the resale value of your project. It's not that you're going to turn a profit on your investment. So you might as well go into the job with realistic expectations about payback.

Because they're among the costliest home projects, addition jobs often return less than remodels. The Remodeling report pegs the following returns on additions: A two-story addition with a family room downstairs and master suite upstairs (65 percent); master-suite-only addition (63 percent); bathroom addition (53 percent); and sunroom addition (49 percent). To maximize your payback, add amenities that are highly sought after in your area. If your neighbors have master suites and you don't, then that's a good investment, says Omaha appraiser John Bredemeyer, past president of the Appraisal Institute, a standards setting organization. If nobody else on the block has one, your payback will be small.

3) Is there a lower-cost way to get what you want? The downturn in addition payback doesn't mean you shouldn't add on—assuming you're doing the work for your own enjoyment and intend to stay in the home for at least 5 years. But it does mean you might want to look for ways to cut the costs of your project. And the best way to do that is to look for ways to eliminate or minimize the need to add on—by using the attic or basement or by simply reconfiguring existing living space, says Eden Prairie, Minn., design-build contractor Mark Mackmiller.