Confronted with high mortgage rates and steep home prices, a growing number of U.S. homeowners are opting to renovate their current properties rather than brave a difficult housing market. This shift is heavily driven by younger generations, with millennials and Gen Zers leading the charge to upgrade instead of uproot.
According to Redfin, 43% of survey respondents renovated their homes over the past year, while another 33% plan to do so in the coming year. For a majority of these individuals, the decision to remodel is a deliberate alternative to relocating.
The Redfin survey revealed that 65% of homeowners who completed renovations in the past year chose to upgrade specifically instead of moving. When looking ahead, that sentiment is even stronger: 71% of homeowners planning a renovation next year say that they are doing so in lieu of buying a new place, per Redfin’s data.
The so-called “lock-in effect” remains a primary driver of this trend. Redfin notes that moving is simply unaffordable for many U.S. homeowners right now.
Approximately 80% of homeowners with a mortgage are locked into an interest rate below current market levels, according to Redfin’s analysis. Even as housing inventory sees slight annual increases, the brokerage reports a persistent shortage of desirable, move-in-ready homes — particularly properties spacious enough for families.
Consequently, younger homeowners and parents are digging their heels in. The survey highlights that 77% of both Gen Z and millennial renovators made improvements rather than moving over the past year, outpacing their older counterparts. Redfin’s data tracks with findings from other industry actors, with groups like the National Association of Home Builders warning that while the renovation sector is doing well, the construction of new homes has lagged behind.
“Many Americans are choosing to stay put and make the home they already have work for them,” Chen Zhao, Redfin’s head of economics research, noted in the report. “Younger homeowners are especially likely to renovate instead of jumping to a different house; they’re earlier in their homeownership journey and more willing to invest in improvements to build equity. Those with kids living at home are often motivated to plant deeper roots where they are so they can stay in the same school district and community.”
Rather than undertaking massive, whole-home transformations, many homeowners are opting for targeted, budget-friendly updates. Most recent renovators spent under $20,000 on their projects, the Redfin survey found.
Specifically, 23% spent between $10,000 and $20,000, while 21% kept their budgets between $1,000 and $5,000. Only 12% of respondents spent $50,000 or more.
A fresh paint job was the most popular upgrade, undertaken by 47% of recent renovators, according to Redfin. Bathroom upgrades (43%) and kitchen improvements (40%) followed closely behind. Notably, 15% of homeowners invested in climate resiliency, adding features to protect against natural disasters like flooding, wind, fire or heat.
While these strategic renovations help homeowners adapt to a restrictive market, real estate professionals emphasize they also build long-term value.
As Jo Chavez, a Kansas City-based Redfin Premier agent, stated in the report: “If you can afford it, investing time and money into making your house look and feel better can help when it comes time to sell. Updated homes tend to sell faster than fixer-uppers, and for more money.”
