How Homeowners Are Funding the Renovation Boom

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How Homeowners Are Funding the Renovation Boom

When it comes to spending $20,000, most American homeowners have made up their minds — and their answer isn’t a passport stamp. According to Rocket Mortgage’s saving for home renovation survey of 1,018 U.S. homeowners conducted in December 2025, 53% of homeowners fund their renovation projects directly from personal savings. That finding sits at the center of a broader story about how Americans are choosing to invest in their homes over splurging on travel experiences. With 75% of respondents saying they’d pick a $20,000 home renovation over a dream vacation, the financial choices people are making to get those projects done reveal just as much as the preference itself. Whether homeowners are tapping equity, reaching for a credit card, or steadily building a dedicated savings fund, the funding landscape for home improvement is more varied — and more deliberate — than many might expect.

Savings Lead the Way, But Financing Is Far From Rare

The single most common way homeowners pay for renovations is straightforward: they save up. Rocket Mortgage’s survey found that 53% of respondents use personal savings to fund their projects. It’s a method that signals patience and planning, suggesting that many homeowners treat renovation as a long-term financial goal rather than an impulse decision.
That said, nearly half of homeowners — 47% — rely on some form of financing to make their projects happen. That’s not a fringe behavior. It reflects a realistic picture of renovation costs and a willingness to use available financial tools to get the job done rather than wait indefinitely. Given that U.S. homeowners collectively spent $608 billion on remodeling in 2025 — approximately 50% higher than pre-pandemic levels, according to the Harvard Joint Center for Housing Studies — the scale of investment happening across the country makes both saving and borrowing entirely understandable strategies.

A Closer Look at How the 47% Are Financing

Among homeowners who do use financing, the breakdown across different products is telling. Home equity lines of credit, or HELOCs, were the most commonly used financing tool, with 13% of survey respondents relying on them. Home equity loans and credit cards each came in at 10%, while personal loans were cited by 7% of homeowners. Cash-out refinancing was the least common option, used by 4%.
The relative popularity of HELOCs and home equity loans together suggests that a meaningful share of homeowners are leaning on the equity they’ve built up in their properties to fund improvements. This approach has an intuitive logic: using the value already stored in a home to increase that home’s value further. It’s a cycle that the survey data supports in another way — 47% of respondents said resale value factors significantly into their renovation decisions. When resale is part of the equation, treating a renovation as an investment rather than pure spending makes borrowing against home equity feel like a calculated move rather than a risk.
Credit cards, while carrying higher interest rates in most contexts, still account for 10% of renovation financing. For smaller projects or homeowners who pay balances quickly, they offer convenience and speed that savings or equity-based products can’t always match.

What Projects Are Worth Saving and Borrowing For?

Understanding how homeowners fund renovations becomes more vivid when you look at what they’re actually spending the money on. Bathroom remodels topped the list of preferred interior projects, with 28% of survey respondents naming them as their top choice. Kitchen remodels came in close behind at 25% — and notably, 28% of homeowners said a dream kitchen remodel would feel more satisfying than a dream vacation. These are not minor touch-ups. Bathrooms and kitchens are among the more involved renovation categories, which likely explains why so many homeowners find themselves saving over time or turning to financing rather than paying entirely out of pocket on short notice.
On the exterior side, landscaping led preferences at 23%, followed by windows and doors at 21%. While these projects can vary widely in scope, they share something in common with the interior picks: they’re improvements that affect both day-to-day livability and, in many cases, resale appeal.

The Social Dimension of Renovation Spending

One factor that doesn’t show up in a budget spreadsheet but clearly shapes renovation decisions is social influence. According to the survey, 53% of homeowners said friends and family are the most influential factor in their renovation choices — making personal networks more persuasive than contractors (31%) or design shows (27%).
This finding adds useful context to the savings and financing data. When friends and family are the dominant influence on what projects homeowners pursue, word-of-mouth enthusiasm can accelerate timelines. A neighbor’s newly remodeled bathroom or a sibling’s kitchen transformation can shift a renovation from “someday” to “this year” — which in turn creates pressure to have funding lined up sooner than originally planned. The result may be a mix of savings plus financing rather than savings alone, as homeowners bridge the gap between what they’ve set aside and what the project actually requires.

The Smart Money Behind Home Upgrades

The financial picture behind America’s renovation momentum is one of deliberate saving, strategic borrowing, and clear priorities. More than half of homeowners are funding projects through personal savings, while nearly as many are using financing tools — particularly HELOCs and home equity products — to close the gap. The projects driving these decisions, from bathroom overhauls to landscaping upgrades, are ones homeowners clearly value both for personal enjoyment and long-term resale potential. With social networks reinforcing renovation ambitions and a national remodeling market that has grown substantially in recent years, the question for most homeowners isn’t whether to invest in their home — it’s how to fund it wisely.

References

Rocket Mortgage. (2025). Home Renovation vs. Dream Vacation Survey. https://www.rocketmortgage.com/learn/home-renovation-costs-vs-dream-vacation
Harvard Joint Center for Housing Studies. (2025). Cited in Rocket Mortgage Home Renovation vs. Dream Vacation Survey. https://www.rocketmortgage.com/learn/home-renovation-costs-vs-dream-vacation