High mortgage rates push homeowners to delay major renovations
Mortgage rates above 7.5% are keeping some owners in low-rate homes while higher equity-borrowing costs curb bigger projects.
By Maya Okafor · Markets Writer
· 3 min read
High mortgage rates and renovations have become a tougher equation for homeowners: CNBC reported that mortgage rates rose above 7.5% during the week of Oct. 3, while many owners still hold first mortgages at 2% to 3%. Moving can mean replacing that lower-rate loan, and borrowing against the home for upgrades has also become more expensive.
For households weighing a remodel, the result is two separate financing pressures. They may be reluctant to sell and take on a new mortgage at today’s rates, yet unwilling or unable to add costly debt to pay for a kitchen, deck or other large project. CNBC reported that this has contributed to homeowners delaying discretionary renovations and putting more attention on maintenance.
Why are high mortgage rates delaying renovations?
A low existing mortgage rate can make staying put financially attractive, even if the home needs work. But keeping the first mortgage does not make other borrowing cheap. A home-equity loan or home equity line of credit, known as a HELOC, would be an additional loan secured by the house and paid alongside the original mortgage.
The Consumer Financial Protection Bureau says a home-equity loan provides a specific amount of money, generally paid in a lump sum, and may carry a fixed or adjustable rate. A HELOC is a revolving credit line that can be drawn repeatedly up to its limit; it usually has an adjustable rate, and payments vary with the outstanding balance. Both products are second mortgages for homeowners who already have a mortgage. The CFPB’s overview notes that the home secures either form of borrowing.
CNBC reported that originations of second mortgages and HELOCs climbed nearly 20% in the second quarter of 2026 from the prior quarter. The report said experts believed borrowers were often using the money to manage household finances rather than fund improvements, an interpretation rather than a disclosed use-of-proceeds dataset.
What are homeowners spending on instead?
Angi co-founder and chief customer officer Angie Hicks told CNBC that homeowners are remaining in their homes about five years longer than they had planned. Angi data cited by CNBC found that 60% of consumers were postponing projects and shifting toward maintenance.
The reported change is in priorities, not a measure of total repair spending. Hicks pointed to furnace tune-ups and water heaters as examples of needs homeowners may address before a new deck or a full kitchen remodel. She also said owners may use savings or complete projects such as landscaping in stages.
Retail data point in the same direction, though it cannot by itself prove why spending changed. Datavations, a retail analytics firm, told CNBC that big-ticket renovation categories at Home Depot and Lowe’s declined 10% to 28% from September 2025 through August 2026 versus the prior-year period. Lowe’s CFO Brandon Sink also said on the company’s latest earnings call that affordability concerns were leading customers to emphasize repairs and maintenance while remaining cautious about large discretionary projects.
For investors watching the home-improvement sector, those figures describe a consumer who may still spend on upkeep but is reported to be more selective about expensive upgrades. The rate data, renovation behavior and retail-category figures cited here were reported by CNBC and include industry-company data and executive commentary, rather than the underlying primary datasets.
This story draws on original reporting from CNBC.
