We’re a country that likes to upgrade our homes. For proof, consider that Americans forked over more than $600 billion last year on home remodeling projects, according to a Harvard study.
Putting dollars and elbow grease into home renovations that add value and generate homeowner happiness makes sense. Every year, the National Association of Realtors, or NAR, publishes a list of projects that meet these criteria.
Let’s take a closer look at home updates that add value as well as leave owners highly satisfied, and explore the most common options for financing these upgrades — including home equity loans, home equity lines of credit, cash-out refinances, personal loans, credit cards and FHA 203(k) loans.
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Projects That Pay Off
Every year, the NAR surveys consumers who have recently completed remodeling endeavors and publishes the results in its Remodeling Impact Report. This report provides two scores for home renovation projects: a zero to 10 “joy score” that indicates homeowner happiness/satisfaction with the improvement, and an estimated return on investment for the project.
Here’s a breakdown of the top-ranking projects for 2025 based on joy scores (the first three projects listed) and cost recovery scores (the last two projects ). You’ll also get analyses from experts on why these upgrades are worth it and how to pay for them.
Project No. 1: Adding a Primary Bedroom Suite
A primary bedroom suite is a spacious private bedroom that includes its own attached bathroom and typically a walk-in closet. It’s designed as a comfortable, personal retreat, often boasting extras like balcony access or a sitting area. This project earned a perfect 10 out of 10 joy score.
Jessica Lautz, deputy chief economist and vice president of research for the NAR, says adding a primary bedroom suite can be perfect for homeowners seeking a retreat at the end of the day and a place to regroup on the weekends. “This project can be costly, however, and could be very personalized to the homeowner’s preferences,” Lautz says.
According to Angi, a bedroom addition can range in cost from $20,000 to $80,000.
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Project No. 2: Kitchen Upgrade
Renovating the kitchen remains a popular update; like the previous project, it also scored a perfect 10 joy score.
“Homebuyers and owners alike love kitchen remodels, both big and small,” Lautz says. “But while it received a 10 joy score, and 30% of Realtors suggested taking on this project before selling a home, the cost recovered is only 60%.”
Keep in mind that the average cost to remodel a kitchen is about $27,000.
Project No. 3: New Roofing
Replacing a roof, likewise, garnered the highest joy score possible. Lautz notes that 37% of Realtors recommended completing this project before attempting to sell a home, as “curb appeal can be very important in attracting a homebuyer, and a new roof is one of the first aspects of a home that a shopper spots.”
Expect to pay nearly $6,000 to over $13,000 for a roof replacement, Angi reports.
Project No. 4: New Steel or Fiberglass Front Door
Upgrading the entry portal with a sturdy new steel door is one of the best home improvements to increase value, earning a perfect 100% cost recovery score. Opting for a fresh fiberglass door instead achieved an 80% cost recovery score.
“New front doors provide safety and security for homeowners, but they also can have the added benefit of energy efficiency when replacing drafty old doors,” says Lautz.
Angi estimates that you’ll likely pay between $500 and $2,000 for a new front door.
Project No. 5: Closet Renovation
Renovating a closet yields an impressive return on investment, as evidenced by its 83% cost recovery score.
“Closet renovations have become more popular projects as homeowners find ways to maximize the space within their home and stay organized,” Lautz says.
The average bill to install a custom closet ranges from $1,500 to $20,000, according to Home Depot.
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What’s the Best Financing Option for Your Project?
In general, for larger and more costly projects, a HELOC or home equity loan is often your best bet. That’s because interest rates are usually lower and you may have access to larger loan amounts. These loans also come with longer terms, which can make the payments more affordable, although extending repayment increases your total borrowing cost.
For smaller jobs, a credit card with a 0% introductory APR can be a lifesaver, assuming you can pay off your balance before the rate resets. Credit cards are generally unsecured and don’t require closing costs or home equity.
Personal loans tend to have lower rates than most credit cards, don’t require home equity and can be funded very quickly. Personal loans can be unsecured, secured by your home or secured by other assets. Adding collateral usually gets you an easier approval and/or better terms.
Then, there’s the FHA rehab loan, which provides the advantages of a mortgage without requiring a lot of home equity. That’s because the loan-to-value is based on the improved value of the property, not the current value.
“An FHA 203(k) loan, meanwhile, is best suited for significant renovations like a primary bedroom suite, kitchen or roof, as it’s designed for structural or energy-efficient upgrades,” says Steven Glick, director of mortgage sales for HomeAbroad.
“Smaller projects like front doors or closets may not qualify unless bundled with larger renovations, as FHA rules prioritize substantial improvements. The standard 203(k) loan covers projects over $5,000, while the limited 203(k) loan can apply to smaller projects — up to $35,000 — with less oversight. Consultant fees vary by project complexity, and FHA-approved contractors are required, which can limit flexibility.”
Before committing to a loan, line of credit or credit card, always run the numbers on total interest and closing costs for each option — don’t just focus on monthly payments, Glick recommends.
Travis Erickson, a mortgage broker for Arizona-based Bonelli Financial Group, also recommends reviewing your credit score before committing to a finance option so that you can learn what rates apply to your situation.
“Use online tools or calculators to compare the real cost of each financing option,” Erickson says. “Read the loan agreement carefully before committing. If the contract doesn’t clearly spell out the terms, steer clear. And watch out for loans that retroactively apply high interest if the balance isn’t paid off within a set period.”
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Here’s How to Finance These Top Home Remodel Projects originally appeared on usnews.com
