Lenders wanting to get in on the $600 billion a year remodeling market had better be offering equity-based financing.
According to the National Association of Realtors (NAR) 2025 Remodeling Impact Report, 54% of homeowners who remodeled their kitchens, redo their bathrooms or take on some other project paid for the work with equity loans or lines of credit. Some 29% more robbed their piggy banks.
Surprisingly, NAR found that just 3% of remodeling jobs were financed through the store where they purchased building products or the remodelers themselves.
With such a small percentage, hooking up with contractors might be another attractive way to dip into the sector. Especially when you consider that almost a third of all home owners used a professional to do the work. (One in four used a contractor but supplied the materials, and the same number bought the materials and did the work themselves.)
Meanwhile, one in ten homeowners chose perhaps the most expensive way to pay for their projects, putting the entire cost on their credit cards. Yikes!
The inability to afford another house, both because of high loan costs and high prices, is often cited as a reason for remodeling the old homestead and staying put. But that wasn’t the case for the majority of the respondents to the NAR study, which numbered roughly 800.
Nearly nine out of 10 said affordability was not a deciding factor, with fewer than one in 10 saying they could not afford to move. For the most part, these folks wanted to replace worn out materials, improve energy efficiency or planned to sell within the next two years. Nearly one out of five simply said it was time for a change.
The majority of these remodelers were satisfied with their projects, siting a sense of accomplishment and having a house that now better fits their needs. They were so pleased that, if cost was not an issue, a whopping 92% would be willing to take on another project.
