Home renovation spending in the U.S. is projected to hit $509 billion in 2025, surpassing the previous record of $487 billion in 2023, as homeowners increasingly opt to renovate rather than move amid high mortgage rates and limited housing inventory. Many are leveraging significant home equity gains—averaging $150,000 over the past five years—to fund improvements, with nearly half of mortgaged homes now considered “equity-rich.” Popular projects include kitchen remodels, bathroom upgrades, and HVAC installations, which not only enhance daily living but also offer substantial returns on investment.
According to The Currency, rock-bottom borrowing rates combined with stay-at-home restrictions drove a surge in home renovations during the pandemic, but expensive interest rates took a toll in the last two years, hampering reno plans for some.3
There are signs that renovations could be making a comeback. Sales of existing U.S. homes dropped 4.9% from December 2024 to January 2025, indicating the option to move may be getting more challenging for homeowners. And while rates have dropped slightly, they’re expected to remain above 6% in 2025.4 According to Realtor.com, this could have many homeowners staying put and focusing on home improvement projects instead.5
