Renovations boom as listings drop 17%

Kiplinger reported on Aug. 5 that U.S. homeowners are increasingly choosing to renovate rather than move as mortgage rates remain elevated and the supply of homes for sale stays below pre-pandemic norms. The publication said many owners are holding onto loans they locked in when borrowing costs were far lower, making a move into a new house markedly more expensive. Realtor.com data cited in the broader housing discussion shows active listings remain well below 2017-2019 levels, even after inventory improved from the worst shortages of the pandemic era. Freddie Mac’s latest weekly survey put the average 30-year fixed mortgage rate at 6.66% as of July 30. ### Why are homeowners remodeling instead of selling? Mortgage rates near the mid-6% range have changed the math for existing owners. Kiplinger said homeowners with older loans in the 3% to 4% range are reluctant to sell and take on a new mortgage at materially higher rates, pushing more households toward projects that adapt their current homes instead. The rate backdrop remains firm. (kiplinger.com) Freddie Mac said the 30-year fixed-rate mortgage averaged 6.66% on July 30, up from 6.58% a week earlier and close to 6.72% a year earlier. That leaves financing conditions well above the borrowing costs many owners secured before rates climbed in 2022 and after. ### How tight is the housing supply right now? Realtor.com said February 2026 active listings were 16.8% below typical 2017-2019 levels nationwide. (kiplinger.com) The company reported 914,860 active listings in February, up 7.9% from a year earlier, but said the recovery in supply had slowed for nine consecutive months. That shortfall helps explain why remodeling demand can rise even when inventory is improving on a year-over-year basis. (freddiemac.com) Kiplinger described the market as stalled rather than frozen: there are more homes available than a year ago, but not enough to restore a pre-pandemic level of choice for buyers or to make moving attractive for many owners. ### What does the inventory data say about where the squeeze is worst? (realtor.com) Realtor.com said the Northeast and Midwest remained undersupplied in February even as all four major regions posted year-over-year inventory gains. The West led with an 11.3% increase in active listings from a year earlier, followed by the Midwest at 10%, the South at 6.9% and the Northeast at 3.8%. Regional differences matter because remodeling demand does not rise from a single national condition alone. (kiplinger.com) In markets where owners still face limited replacement options, the decision to add a room, update a kitchen or rework a layout can be a substitute for listing a home and shopping for another one. That is an inference drawn from the combination of Kiplinger’s reporting on owner behavior and Realtor.com’s inventory data. (realtor.com) ### Are lower rates likely to unlock more moves soon? Realtor.com’s 2026 midyear forecast projected mortgage rates would average 6.3% this year, suggesting only modest relief rather than a return to the ultra-low borrowing costs of the pandemic period. Kiplinger’s framing of the remodeling trend rests on that same point: even if rates ease somewhat, many owners would still be giving up loans far below prevailing market levels. (kiplinger.com) Freddie Mac publishes its Primary Mortgage Market Survey weekly on Thursdays at 12 p.m. Eastern, and Realtor.com updates its housing inventory figures monthly. Those two releases will show whether borrowing costs and the supply gap begin to narrow enough to shift owners from renovation plans back toward selling. (freddiemac.com) (realtor.com)