The nation’s homeowners aren’t remodeling because they can’t afford to move out. They are tapping into their home equity as their property values soar.
In the “2025 Remodeling Impact Report” the National Association of Realtors and National Association of the Remodeling Industry released Wednesday, only 10% of homeowners surveyed said concerns about housing affordability and rising mortgage rates were factors in their decision to remodel their current homes.
Americans spent roughly $603 million remodeling their homes in 2024, with remodeling contractors seeing a 42% increase in demand over the past two years, according to the report.
How do they pay for it? Fifty-four percent of owners took out a home equity loan or line of credit, while 29% used their savings and 10% used their credit cards.
“Interestingly, despite the 'lock-in effect' — where low-interest-rate mortgages discourage homeowners from moving — housing affordability isn’t a significant reason why consumers choose to remodel their homes,” Jessica Lautz, NAR deputy chief economist and vice president of research, said in the report. “Instead, the substantial housing equity that homeowners have built up over time enables them to invest in transforming their homes while they remain in place.”
The survey suggested that 27% of homeowners remodeled their properties to upgrade aging materials, with improving energy efficiency following close behind at 19%. Homeowners just itching for a change and those looking to sell within the next two years both weighed in at 18%.
But remodeling investments have different payoffs, with a new steel front door clocking in at full cost recovery, per an estimate from the National Association of the Remodeling Industry. Often streamlined in appearance, these doors are also marketed for the durability and security they offer.
The survey reported the largest slice of respondents (29%) hired a professional to do their renovations, but nearly 24% embraced the DIY approach, purchasing the materials and putting in the labor themselves. The same percentage of respondents (24%) elected for a mix, purchasing the materials but hiring a professional to do the work.
Real estate agents reported seeing the most demand for kitchen upgrades and new roofing over the past two years. When a client looks to sell a home, however, 51% of agents recommend that clients paint their entire house before listing. Forty-one percent recommend painting at least one room.
When a project is all said and done, increased functionality was the most important result, the majority of respondents (28%) said. Another 23% pointed to aesthetic improvements or the "durable, long-lasting results, materials and appliances." Fifteen percent cited green home features and energy efficiency.
And it seems that while the homeowners surveyed were eager to carry out more renovations, certain facets of the process were taken into consideration.
In the report, 92% of the respondents said they would remodel even more of their home if cost weren’t a factor.