Home renovations can get expensive fast. Whether it’s a bathroom refresh or a major kitchen overhaul, one question always comes up: how do homeowners pay for renovation costs?
The 2025 Houzz & Home Study offers a fresh look at how homeowners are funding their upgrades and what’s changing. There’s a clear shift happening in how people think about home improvement spending, especially among those taking on bigger or more luxurious projects. We're sharing what the numbers reveal and what it could mean for your own plans.
Savings Still Reign, but Big Projects Shift the Strategy
Most homeowners are using their savings to pay for home renovations—84% of them, according to the study. It’s been the go-to funding source for years and isn’t going away anytime soon.
What is changing is how people handle bigger-ticket projects. For more expensive renovation projects, like those in the $50,000 to $200,000 range, more homeowners are turning to secured loans. About 18% of those taking on higher-end projects used secured loans to help fund the work.
Home Equity Lines of Credit (HELOCs) are the most common form of secured loan, making up 6% of projects overall. Others opt for cash-out refinancing or home equity loans, both at 3%. These options for homeowners allow access the value built up in their homes, which makes sense for major updates or full-scale remodeling projects.
There’s also a jump in the number of luxury renovators using funds from recent home sales. That group is nearly twice as likely to use this option—19% versus 10% among the general renovating population. This signals that some homeowners are rolling equity from one home into another, or investing sale profits into their “forever” home.
Credit Card Use is Down, But Still a Factor
Credit cards are still the second most-used way to pay for home improvements, used by 29% of homeowners. That number is down 8 percentage points from the year before, and the study suggests that might reflect a broader shift toward more stable, long-term financing options... especially as interest rates remain relatively high.
That said, credit cards may still appeal to people tackling smaller updates. They offer convenience and sometimes rewards, which can make sense for purchases like new appliances or furniture when the loan term can be short and the balance paid quickly. For larger projects, though, interest charges can pile up fast.
Renovation Spending Reflects Long-Term Plans
Many homeowners aren’t just upgrading for now—they’re in it for the long haul. The study found that 56% of homeowners renovating have full equity in their homes (that means: no current mortgage).
61% say they plan to stay in their home for at least another 11 years after the renovation process. That kind of timeline often justifies more investment and a more thoughtful financing strategy.
There’s also a sense of finally having the time and money to tackle long-postponed updates. The report says that pent-up demand continues to be the top reason for renovating. About 40% of respondents said they now have the time, and 35% said they now have the means, whether due to cash reserves or higher credit scores.
All that said, it's no surprise to see that Baby Boomers and Gen X homeowners continue to lead renovation activity and have a similar budget for renovations (about $20,000 each at the median). But in the upper range, Gen X is pulling ahead. In the top 10% of spenders, they’re spending $150,000 or more on major home renovations—outpacing both Baby Boomers and Millennials.
Even with recent dips in kitchen and bathroom remodeling spend, these two spaces remain at the heart of most home improvement projects. Major kitchen remodels are still popular, but this year bathrooms matched them for the first time—each claimed by 24% of renovators.
All of this points to a clear theme: people are investing in homes they plan to stay in, thinking more strategically about how they pay for project costs, and increasingly leveraging tappable equity.
If you're pacing ahead with your own reno plan, remember this... financing isn’t one-size-fits-all. The trick is matching the payment method to the size and scope of your project... and your future plans.
