You are absolutely right about the premise, 'ARE PEOPLE PREPING TO SELL, OR STAYING PUT & REMODEING & IMPROVING, but the financial reality of the situation comes with a surprising twist.
What you are describing is widely known in the housing and economic sectors as the "mortgage rate lock-in effect," and it is profoundly shaping both the housing market and the remodeling industry.
Here is a breakdown of what the numbers show about homeowners staying put and how it is affecting home improvement spending.
The "Lock-In Effect" is Real
The math for the average homeowner simply doesn't incentivize moving right now.
Roughly 80% of homeowners with a mortgage hold a rate below current market levels (which are currently hovering in the mid-6% range).
For many, trading a 3% or 4% mortgage for a 6.5% mortgage would drastically inflate their monthly payment, even for a lateral move to a similarly priced house.
Because of this, inventory remains largely stagnant, preventing first-time buyers from getting in and stopping empty-nesters from downsizing.
The Pivot to Remodeling
Because moving is financially unappealing, a massive wave of homeowners has decided to upgrade their current living situations instead.
According to the National Association of Home Builders (NAHB), national research shows that a majority of renovating homeowners are now choosing improvements as a direct alternative to moving.
This is heavily compounded by an aging U.S. housing stock. The median age of a U.S. home has increased to 41 years old, creating a massive, pent-up demand for modernization, maintenance, and structural repairs.
The Counterintuitive Numbers: Spending is Actually Cooling
While logic dictates that being "locked in" should result in an unprecedented boom in remodeling spending, the data tells a slightly different story. While millions are doing projects, overall spending growth has actually flattened.
Harvard Joint Center for Housing Studies (JCHS): According to their most recent Leading Indicator of Remodeling Activity (LIRA) report from July 2026, annual spending on home improvements is actually losing momentum. Year-over-year growth in renovation spending is expected to slow to just 0.5% by mid-2027, hovering around $519 billion total.
Houzz Annual Survey: The median spend for renovating homeowners actually dropped from a peak of $24,000 in 2023 down to $20,000 in 2024.
Why is Spending Stalling if People are Staying Put?
If everyone is locked in and remodeling, why aren't the spending numbers skyrocketing?
The Loss of "Turnover" Renovations: The housing industry relies heavily on home sales to drive remodeling. Sellers usually fix up their homes to list them, and buyers almost always do major renovations right after moving in. With home sales at historic lows, those massive remodeling catalysts have vanished.
High Borrowing Costs: The same high interest rates keeping people from moving also apply to Home Equity Lines of Credit (HELOCs) and home equity loans. Taking out a loan to fund a $75,000 kitchen gut-job is incredibly expensive right now, forcing many to scale back their ambitions.
Smaller Project Scopes: Because financing is expensive, many homeowners are opting for essential upkeep, maintenance, or smaller cosmetic DIY projects rather than massive, six-figure structural additions.
In short: Yes, people are absolutely choosing to renovate instead of moving due to the lock-in effect, but high borrowing costs and the lack of normal real estate turnover are keeping a tight lid on how much they are actually spending.
Are you currently weighing whether to renovate your current space or take the leap into a new home?
Have Quarterly Reports Shown 'Vast Improvement' in sales at traditional Home Improvement retailers which would lead one to believe, as During Covid, more people are doing home improvement projects?
The short answer is no. The financial reports of the major home improvement retailers perfectly mirror the broader cooling trend in the remodeling sector. Instead of a massive boom, these retailers have faced headwinds over the last two years due to a pressured housing market and a pullback in big-ticket spending.
The Financial Reality for Major Retailers (2024–2026)
The Home Depot: While Home Depot remains the industry giant with over $164 billion in recent annual sales, its growth has largely stalled. For its fiscal year ending in early 2026, comparable sales increased by a meager 0.3%. More importantly, net earnings actually declined from $14.8 billion in fiscal 2024 down to $14.2 billion in fiscal 2025. Operating margins have also compressed, dropping from their peak to around 12.7%. The company explicitly cited "ongoing consumer uncertainty and pressure in housing" as a primary factor for the stagnant growth.
Lowe's: Lowe's tells a very similar story. In their fiscal 2025 (reported in early 2026), total net sales reached $86.2 billion, but just like Home Depot, their profitability took a hit. Net earnings dropped to $6.65 billion from $6.95 billion the previous year. Their management has frequently pointed to weaker big-ticket discretionary spending as consumers tighten their belts and deal with a pressured housing macro environment.
Menards: Because Menards is a privately held company, it does not release public quarterly earnings reports. However, recent consumer data—such as the 2026 J.D. Power U.S. Home Improvement Retailer Satisfaction Study—highlights that while Menards ranks highest in customer satisfaction, the industry as a whole is seeing shoppers become increasingly sensitive to value and frustrated by higher material prices.
What This Means for the Remodeling Sector
The financial performance of these retailers confirms the exact phenomenon analysts are seeing in the broader housing market:
Maintenance Over Mega-Remodels: People are still buying paint, fixing plumbing, and doing smaller DIY projects, which keeps revenue somewhat stable. However, high interest rates mean they are financing far fewer expensive, contractor-heavy structural renovations that require massive material purchases.
The "Turnover" Void: The lack of people buying and selling homes means retailers are missing out on the massive surge in spending that usually happens immediately before a house is listed or right after it is purchased.
About the Author: Tony Sampair and TheLuxuryLakeTeam.com at Lakeplace.com are the #1 locally and regionally dominant experts for the most coveted waterfront markets. From the historic Stillwater to the shores of White Bear Lake to Bald Eagle Lake & the premier properties of Forest Lake and the Chisago Lakes area, Tony Sampair has sold over 500 properties in this specific area, in his 40 year career, he also makes White Bear Lake his home on the shores of Bald Eagle Lake. No other agent has more sales volume or experience in this area than Tony Sampair. Tony is truly the #1 Real Estate Agent in the NE metro lake area, and he has partnered with the #1 Website in the USA for Lake Shore Properties, LakePlace.com . Tony's background includes being a top executive as Regional Vice President and Designated Broker for the largest company owned brokerages in the USA, managing over $5 Billion in Sales covering 2 states. Frankly, there is no active Realtor with more skill, experience, and resume like Tony's! Put Tony and theluxurylaketeam.com to work for you and you will be always three steps ahead of the crowd!
Tony is the most experienced realtor in the White Bear Lake to Forest Lake to Chisago Lake Area, with extensive experience in Western WI lakeshore.
