Nearly Two in Three Homeowners Accrued Home Renovation Debt This Year, Survey Reveals

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High home prices and mortgage rates keep many American homeowners from moving to a new home. More than 6 in 10 say they’d prefer to remodel their current home rather than move to a new one, according to a new survey of 1,000 homeowners from Clever Real Estate.

They’re not letting financial constraints stop them from customizing their living space. Around 40% of homeowners plan to spend $10,000 or more on renovations in 2025. However, nearly 80% of homeowners went over budget on their last renovation, and two-thirds went into debt to fund home improvement projects.

That leaves 74% of homeowners with renovation regrets; nearly half say they liked their house more before remodeling.

Renovations Getting Pricier

About 45% of homeowners spent $5,000 or more on renovations this year, while 36% spent $10,000 or more. Nearly half (44%) expect to spend more on home renovations this year than last year.

More than three-quarters of homeowners said their last project exceeded their planned budget. Nearly half of overspenders (44%) said the work was at least $5,000 more than expected, and 35% spent $10,000 more than anticipated.

In the face of budget-busting expenses, homeowners have two choices: Find the money or stop work. Around 32% stopped a renovation project before its completion because of unexpected costs. Around 63% took on debt to finish the work.

Many renovators who borrowed money to finish their projects faced financial consequences later — about 36% struggled to pay credit card bills after completing home renovations.

When Renovating, Less Is More

Ninety-four percent of homeowners tackled a major renovation in the past five years, while 93% tackled a minor one over that same time period.

The most popular major renovation was a bathroom remodel, completed by 37% of homeowners. About 33% of homeowners painted their interior, while 30% upgraded heating and air conditioning.

“Since I work in a market with many older homes, many of which were built without central air conditioning, adding central air is an improvement that will almost always bring you a great return on investment,” said Cleveland-based real estate agent Geoffrey Hoffman. “And you get to enjoy it as well.”

For minor renovations, 36% installed new faucets, 35% installed new light fixtures, and 34% completed minor kitchen updates.

An interesting twist? Some minor renovations provide more value than major ones. Data shows minor kitchen remodels recoup about 96% of the cost when the home eventually sells, while major kitchen remodels generally recoup just 38%.

One of the most worthwhile renovations is upgrading a garage door, which provides a resale value nearly double the replacement cost. However, only 19% of homeowners have completed this renovation in the past five years.

Weighing the Pros and Cons

Ninety-two percent of homeowners said their home improvements positively impacted their lives, but 74% of renovators had regrets.

About one-fourth of homeowners (24%) said they spent too much money, making it the most common regret. An additional 22% regret the renovation took too long.

About 1 in 9 homeowners disliked their post-renovation home, and nearly half of renovators said they liked their home better before they renovated.

Young people were much more likely to experience post-renovation regrets. Only 51% of boomers regretted their renovation, while 82% of millennials and 89% of Gen Z renovators expressed regret.

Homeowners Will Do It Themselves

A majority of homeowners would do a project themselves to save money instead of hiring a professional. The most popular DIY home improvement projects are fairly straightforward — 62% painted their interior, 61% installed new light fixtures, and 59% sealed or stained a deck.

Many homeowners would tackle even more complex projects. More than a third said they’d feel comfortable replacing their roof, replacing their electrical system, adding a home addition, or upgrading their plumbing.

However, many homeowners fail to consider the possibility that mediocre DIY renovations may hurt their home’s value more than it helps.

“One universal truth is that any improvement or renovation done poorly will hurt the value,” Hoffman said. “New isn’t always better. An older kitchen in good condition is better than a cheaply renovated new kitchen installed with poor workmanship.

“Unfortunately, I often see homes flipped or renovated by DIYers who did bad work or simply made terrible design choices. It’d be better if they left it alone, learned to do it correctly, or hired a professional.”

 

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