Renovations Boom As the Housing Market Stalls

# Renovations Boom As the Housing Market Stalls

With home sales cooling and mortgage rates staying elevated, homeowners are shifting their spending from buying to improving what they already own. The renovation market is booming as people stay put longer and invest in their current properties instead of trading up.

This trend creates both opportunity and risk for homeowners. The key is choosing renovations that deliver real returns and that fit your budget realistically.

Kitchen and bathroom updates typically recover 50 to 80 percent of their cost when you sell, making them solid bets. New roofing, updated HVAC systems, and improved insulation also appeal to future buyers. Avoid luxury upgrades tailored to your personal taste that won't resonate with the next owner. A $40,000 wine cellar rarely recoupes its expense.

Before hiring contractors, get at least three competitive bids. Use licensed, insured professionals with verifiable references and completed projects you can inspect. Check state licensing boards and the Better Business Bureau. Vague estimates or pressure to decide quickly are red flags.

Financing options matter. Home equity lines of credit (HELOCs) currently carry rates around 7 to 9 percent depending on your credit profile and lender. Cash-out refinances lock in longer terms, typically 15 to 30 years, at rates near 6 to 7 percent. Personal loans run 8 to 12 percent for shorter repayment windows. The cheapest option depends on how much you borrow and when you plan to repay.

Set your budget with a 15 to 20 percent contingency buffer. Walls hide surprises. Hidden water damage, outdated wiring, or structural issues emerge once work begins, and overruns happen regularly.

Track every expense and keep receipts. Some home improvements qualify for