Home, In 2026, the hottest housing decision isn’t “buy or sell.” It’s “stay and upgrade—or pay the moving penalty.” With mortgage rates still meaningfully higher than the ultra-low loans many owners already have, a growing share of households are choosing to renovate instead of move.

This isn’t a DIY-only moment, either. The data shows homeowners are planning sizable projects, hiring professionals, and designing their homes for long-term living—not quick flips.

The 2026 snapshot (what the numbers say)

• Mortgage rates are still a friction point: Freddie Mac’s weekly survey shows the average 30-year fixed rate at 6.09% on January 22, 2026.
• Rate lock-in is real: Realtor.com reports 51.5% of outstanding mortgages are ≤4% and nearly 69% are ≤5%, which helps explain why owners hesitate to trade up.
• Remodeling is holding near record highs: Harvard’s LIRA (as reported by trade outlets) projects 2.4% growth in early 2026, easing to 1.9% by Q3, with spending expected to reach ~$524B in early 2026 (record high).
• Homeowners are committed: Houzz research finds 91% of homeowners plan to move forward with renovations in 2026, and 75% plan to spend more than $10,000.
• Pros are in demand: Houzz reports 93% of homeowners plan to hire professional help.
• The remodeling industry sees steady momentum: NAHB’s Remodeling Market Index posted 64 in Q4 2025, and NAHB explicitly ties 2026 demand to aging homes, equity, and aging-in-place needs.

That’s the “why now.” Next: the “why it’s accelerating.”

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1) The mortgage “swap” is still expensive (even after easing)

The housing market doesn’t need 8% rates to freeze—it just needs “higher than your current loan.”

Freddie Mac’s January 2026 average rate (6.09%) is meaningfully above what many owners locked in earlier this decade. That spread creates a psychological and financial barrier:

• Realtor.com’s research shows a heavy concentration of owners sitting on ≤5% mortgages, which keeps resale inventory tight and discourages voluntary moves.
• In practical terms, Realtor.com notes the typical homeowner would see their monthly payment rise by nearly $1,000 if they sold and bought a median-priced home in today’s environment.

Translation for homeowners: Renovation becomes the “upgrade path” that doesn’t require re-underwriting your life at a higher rate.

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2) Moving costs are a silent deal-breaker (and renovations feel more “bankable”)

Even if a homeowner could afford the new payment, the transaction costs of moving have become impossible to ignore.

• Zillow estimates sellers typically pay 8%–10% of the sale price in closing costs (including commissions and associated fees).
• Zillow also notes buyers typically pay 2%–5% of the purchase price in closing costs.

When homeowners run the math, many conclude:

“If I’m going to spend tens of thousands either way, I’d rather put it into the home I already own.”

That logic isn’t emotional—it’s capital allocation.

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3) Inventory constraints aren’t just a buyer problem—they’re a homeowner problem

A homeowner may want to move, but if the next house is:

• scarce,
• overpriced,
• or requires concessions…

…then renovating the current home becomes the more controllable option.

Recent market reporting continues to show how limited inventory and lock-in dynamics feed each other (homeowners don’t list, buyers can’t find, owners can’t “trade up” easily).

The important real estate takeaway: Renovations don’t just reflect market conditions—they actively shape future supply by delaying resale.

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4) Home equity is still a powerful fuel source for projects

The “renovate instead of move” trend works because many owners have something buyers don’t: embedded equity.

Cotality’s Q3 2025 Homeowner Equity Report shows:

• Total homeowner equity: $17.1 trillion (for borrowers with a mortgage)
• Average borrower equity: about $299,000

NAHB also explicitly cites strong homeowner equity as a core support for remodeling demand into 2026.

This is why we’re seeing more “mid-to-high budget” renovation behavior in 2026: homeowners can fund upgrades without needing to win a bidding war for a replacement home.

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5) America’s housing stock is aging—and “maintenance renovations” are unavoidable

Some renovations are lifestyle upgrades. Others are simply deferred maintenance coming due.

NAHB highlights that:

• Almost half of owner-occupied homes were built before 1980
• The median age of owner-occupied homes climbed to 41 years in 2023

An aging housing stock naturally increases demand for:

• roof, HVAC, windows, plumbing, electrical,
• insulation and weatherization,
• layout modernization,
• and code-driven updates.

So even when discretionary spending slows, need-to-do work stays sticky—and it shows up in renovation volume.

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6) Renovations in 2026 are increasingly “forever-home” decisions

Here’s the part many agents miss: this is not just a financial reaction to rates.

Houzz’s 2026 Renovation Plans report signals a long-term orientation:

• 62% of renovating homeowners plan to stay more than 11 years after renovating
• Nearly half (45%) don’t plan to move out after the project is complete
• Only 4% anticipate moving in the next year

This is a shift from “upgrade for resale” to “upgrade for life.”

And that’s a major change in how real estate demand will express itself:
more additions, reconfigurations, accessibility improvements, and multi-use spaces—not just cosmetic refreshes.

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What homeowners are renovating for in 2026

From a search-intent perspective, “renovate instead of move” is really shorthand for five homeowner goals:

1) Create space without moving

• home office builds, loft conversions, finished basements
• garage conversions
• additions that solve family growth or hybrid work

2) Reduce homeownership risk

• replacing aging systems before failure
• improving drainage, ventilation, and water management
• upgrading electrical capacity for modern loads

3) Improve daily livability

• kitchen workflow
• bathroom count and comfort
• storage and organization

4) Support aging-in-place and multigenerational living

NAHB directly calls out aging-in-place improvements as a demand driver.

5) Make budgets predictable (as much as possible)

Even with inflation pressures, homeowners can phase renovations, control scope, and avoid re-entering the mortgage market.

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The “surge” isn’t just in intent—budgets are real

Houzz’s data signals that 2026 projects aren’t trivial:

• 75% plan to spend more than $10,000
• 29% estimate $50,000+ budgets

At the same time, homeowners know the friction points:

• 63% cite rising product/material costs as their top concern
• 31% cite higher labor costs
• 25% cite difficulty finding available professionals

This combination (high intent + real budgets + known constraints) is exactly what makes this an enduring trend—and not a short-lived fad.

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What this means for real estate (agents, teams, and brokerages)

If you’re in real estate, this trend changes your pipeline in three important ways:

1) Your “not selling” clients are still active clients

They may not be transacting today—but they’re:

• hiring contractors,
• pulling permits,
• changing layouts,
• and increasing future resale value.

A renovation client in 2026 is often a future listing in 2027–2030.

2) Content that wins in 2026 is “decision support,” not dream browsing

Top-performing topics in this cycle tend to be:

• renovate vs move calculators (decision frameworks)
• best renovations for resale in your market
• permitting timelines and “what it costs” explainers
• contractor selection checklists
• renovation financing basics (educational, non-advisory)

3) Renovation expertise is now a competitive advantage

NAHB’s RMI strength and Houzz’s “93% hiring pros” data both point to one reality: homeowners are actively shopping for trusted vendors.

Agents who can responsibly connect homeowners to qualified pros (and set expectations on timelines/costs) become the “hub” of the stay-put economy.

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A simple decision framework: renovate instead of move (2026 edition)

Use this quick logic with clients:

Renovate if…

• you have a strong existing mortgage rate you don’t want to replace
• you can solve your main pain point (space/functionality) with a targeted project
• you plan to stay 5+ years (many are staying far longer)

Consider moving if…

• the home can’t reasonably be adapted (lot constraints, HOA limits, structural constraints)
• neighborhood/location no longer works (schools, commute, safety)
• renovation cost approaches the value gap to a better-fit home

Pro tip for agents: Don’t treat this as “sell vs don’t sell.” Treat it as “best housing outcome,” then stay attached to the client either way.

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FAQ (great for SEO + Featured Snippets)

Is renovating really more affordable than moving in 2026?

Often, yes—because moving can trigger a higher mortgage rate and significant closing costs. Zillow estimates sellers often pay 8%–10% in closing costs, while buyers commonly pay 2%–5%.

Why are homeowners staying put longer after renovations?

Houzz reports 62% plan to stay more than 11 years after renovating, and only 4% expect to move within the next year—suggesting renovations are being made for long-term living, not quick resale.

What’s driving remodeling demand besides mortgage rates?

NAHB points to an aging housing stock, strong homeowner equity, and increasing need for aging-in-place improvements.

Are homeowners still planning big projects despite cost concerns?

Yes. Houzz found 75% plan to spend more than $10,000 in 2026, even though rising product/material costs are a top concern (63%).

Is the remodeling market expected to keep growing through 2026?

Harvard’s LIRA outlook (as reported by industry publications) projects modest growth: up around 2.4% early in 2026, easing to ~1.9% by Q3, with spending near record levels.

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