As mortgage rates remain high, more and more homeowners are tapping into their home equity to finance renovations or pay off debt. In fact, home equity loans increased by 50% in 2022 compared to two years earlier. 

That said, if you’re in the planning stages of a home renovation, you might be interested to see which projects have the best return in 2023. Here are the five projects with a high ROI from the 2022 NAR Remodeling Impact Report:

Refinish hardwood floors: 

Owners enjoyed a 147% return on their investment in refinishing hardwood floors. Two major motivators for undertaking the project? A desire to upgrade worn-out surfaces, finishes, and materials and improve liveability. Thinking you can DIY? Here’s what it’ll take. 

Install hardwood floors: 

Replacing tile or carpet with hardwood floors gave homeowners a 118% ROI in 2022. Plus, 90% of individuals interviewed reported an increased desire to be home more since completing the project. 

Insulation upgrade: 

If you plan on staying put, upgrading your home’s insulation may be worth considering. It’ll improve your home’s energy efficiency, possibly lower your power bill, and put 100% of the cost back in your pocket when it comes time to sell. 

Basement conversion to a living area: 

If you’ve got extra living space just below your nose, you’ll enjoy an 86% ROI if you convert it to liveable square footage. That’s good news considering the average cost of a basement renovation is just under $60,000. 

Closet renovation: 

Three reasons to replace that outdated wire shelving system with something made just for you? 1) You love good storage, 2) Buyers love good storage, and 3) Everybody loves good storage. Plus, you’ll see an 83% ROI. Draw fresh inspiration from these before-and-after closet makeovers. 

While renovations can be costly, you’ll see most of that money again when you sell if you choose your projects wisely — plus, you’ll fall in love with your home all over again.