A growing share of U.S. homeowners are choosing to renovate their current homes instead of moving, a trend that reflects ongoing affordability challenges and continues to constrain housing turnover.
More than two in five Americans (43%) completed home renovations in the past year, while another 33% plan to renovate in the next 12 months, according to a survey commissioned by Redfin.
For many borrowers, renovation is replacing relocation altogether. Roughly 65% of recent renovators said they upgraded their existing home instead of moving, and 71% of those planning renovations next year say they intend to remodel rather than buy a new home.
The data points to a persistent “lock-in effect” driven by higher mortgage rates and elevated home prices. About 80% of homeowners with a mortgage currently hold rates below today’s levels, making it financially unattractive to sell and take on a new loan at a higher rate.
That dynamic continues to limit housing supply, particularly for move-in-ready homes, even as inventory shows modest year-over-year improvement.
“Many Americans are choosing to stay put and make the home they already have work for them,” said Chen Zhao, head of economics research at Redfin.
Younger Homeowners Driving The Shift
The trend is especially pronounced among younger borrowers. Gen Z and millennial homeowners are more likely than older generations to renovate rather than move, with 77% in each group opting to improve their current homes over the past year.
Homeowners with children are also more likely to invest in renovations, often to accommodate space needs while remaining in the same community or school district.
Most Projects Remain Modest In Size
While renovation activity is widespread, most projects remain relatively small in scope.
About 23% of homeowners who renovated in the past year spent between $10,000 and $20,000, while 21% spent between $1,000 and $5,000 and 20% spent between $5,000 and $10,000. Another 16% reported spending between $20,000 and $50,000.
Fewer Transactions, New Opportunity Channels
The trend reinforces two competing realities:
- Fewer homeowners moving translates into reduced purchase volume and slower housing turnover, particularly among existing homeowners who would otherwise be repeat buyers.
- The shift creates opportunity in adjacent lending channels. Renovation financing, home equity lending, and cash-out refinance strategies are likely to remain relevant as borrowers look to fund upgrades without giving up their current mortgage rate.
With affordability still a barrier and rate-sensitive borrowers staying put, the data suggests the purchase market may remain constrained, even as demand for housing improvements continues to grow.
