Are you a first-time homeowner who can’t wait to add a deck to your new place so you can enjoy summertime get-togethers? Maybe you hope to own a home soon and are curious whether a fixer-upper makes financial sense? Or have you owned your home for many years, and realize it’s time to tackle some much-needed upgrades here and there?

You’re not alone. Spending on home improvements is expected to continue its red-hot pace for the remainder of this year and is predicted to hit nearly $450 billion nationwide by the first quarter of 2023. Double-digit home price appreciation and record home equity levels are helping to fuel continued interest in all sorts of remodeling — whether it’s aimed at improving livability or simply replacing worn-out materials.

No matter what your renovation goal is, it’s important to know what you can expect to recoup from any home improvements you do, and which projects could add the most value to your home. Interestingly, it’s not necessarily the spa bathrooms or high-end kitchens that deliver the greatest payoff, according to the 2022 Remodeling Impact Report, a new study released last month by the National Association of Realtors Research Group and the National Association of the Remodeling Industry.

To help guide your plans, here are five interior and exterior projects that currently bring the biggest return on investment (ROI).

1. Refinishing or installing hardwood floors

Refinishing hardwood floors typically comes with a price tag of $3,400, but the estimated ROI is $5,000. That’s a 147% recovery of costs, the report finds. The estimated cost of installing hardwood floors is higher at $5,000. But with a $6,500 return on investment, 118% of the cost is recouped.

2. Upgrading insulation

It may not sound exciting, but 77% of homeowners surveyed in the report say they choose this project for “green” reasons — to improve their home’s energy efficiency. Priced at an estimated $2,500, this upgrade delivers a 100% return, the research shows.

3. Turning a basement into living space

A popular project with an estimated cost of $57,500, the report finds that homeowners can recoup 86%, or $49,250, of what they spend to convert a basement into a functional living area.

4. Installing new roofing

It’s an expense that many homeowners must undertake at some point — and one that new home buyers like to see on the list of recent updates. What’s the ROI of a $12,000 roof job? It’s 100%, the data shows.

5. Replacing garage doors

This curb-appeal project — often done when homeowners expect to sell in the near term — comes in at $2,000. And just like re-roofing, new garage doors bring a 100% ROI.

So, what about those kitchen and bath projects?

• ●A complete kitchen renovation, with an estimated cost of $80,000, returns 75% of that amount in value, or $60,000.
• ●A $35,000 bathroom renovation recoups 71% of your cost, or $25,000, the research shows.

Realizing the rewards of home remodeling

Home improvements can bring a lot of benefits: Not only do they make your home more enjoyable to live in, but they also can increase your home’s value. If you’re looking to finance some sprucing up this season, now could be a great time to consider a home equity line of credit (HELOC). HELOCs let you borrow against the equity in your home — or the home’s market value minus the mortgage balance you owe. They’re flexible, and let you tap whatever amounts you need, as you need them, to pay for remodeling expenses. Find out more about whether a HELOC might be right for you.