For many homeowners who locked in historically low pandemic-era mortgage rates, upgrading to a larger home isn’t as financially appealing today. With elevated interest rates, ongoing affordability pressures, and limited housing inventories, many households are considering staying put and investing in upgrades, additions, and remodels rather than taking on a new mortgage.  

A few recent studies reflect this shift. In a 2025 survey, many homeowners cited the cost of buying a new home as the reason they chose not to sell, prompting a shift toward renovation and expansion projects.[1] Through other recent research, experts anticipate that spending on home renovations and remodeling could reach new highs in 2026.[2]

Between higher borrowing costs, strong homeowner equity, and a reluctance to give up favorable mortgage rates, renovation activity has become an increasingly prominent trend in today’s housing market. 

If you’re weighing whether to renovate or relocate, here are some of the financial and lifestyle considerations that can help guide your decision – along with the tools and financing options to help support whichever path you choose. 

Love the Home You’re With: When Renovating Delivers More Value 

Your Current Mortgage Rate

One of the biggest factors keeping homeowners in place is their existing mortgage rate. Those who locked in loans at rates between 2 and 3% may see noticeably higher monthly payments if they purchase a new home at today’s higher rates. 

“Many homeowners today are weighing the trade-off between holding onto a very attractive existing mortgage rate and finding a home that better fits their needs,” says Peter McCarthy, PNC Bank’s Head of Home Lending. “In many cases, the math can favor renovating, especially for those who secured historically low rates over the last several years.”

Inventory Challenges

Low housing inventory continues to challenge buyers in many markets across the country. Even when an ideal new home becomes available, competition can be steep – often driving up prices and making some buyers reconsider their budget. 

Customization Without Relocation

Renovating allows homeowners to tailor their existing space to evolving needs. Whether it’s adding a bedroom, expanding the kitchen, finishing the basement, or reimagining the layout, improvements can make a home feel brand new – without the disruption of a move.

“Many home improvements can be viewed as an investment in your property’s long term value,” says Joe Perveiler, PNC Bank’s Head of Home Lending Product. “Renovations often allow people to stay in the communities they love while tailoring their home to changing family or lifestyle needs.”

Bottom Line

Renovating may be the more suitable option when: 

  • You love your neighborhood, school district, or community; 
  • Your current mortgage rate is significantly lower than market rates;
  • You have built equity that can help fund improvements through a home equity loan or home equity line of credit (HELOC);
  • Your needs are functional, not foundational – such as updating outdated spaces or adding flexibility; and/or
  • You plan to stay in your home for several more years, allowing you to enjoy the improvements and recoup value over time.

If you’re considering making updates to your current home, PNC’s Home Renovation Calculator can help you estimate potential costs and explore financing options aligned with your goals.  

Moving On Up: When a New Home Makes More Sense 

While renovations are appealing to many homeowners, moving can offer potential financial or lifestyle advantages in certain situations. 

Buying a new home may be the better fit when:

  • Your current home cannot be expanded due to layout or zoning constraints;
  • Renovation costs exceed the value they would add;
  • You need substantially more space – such as additional bedrooms, a larger yard, or a drastically different floor plan; or
  • Life changes such as a new job, growing family, or desired school district require a location change. 

PNC’s Home Insight Planner[3] can help you evaluate mortgage options, compare monthly payments, explore affordability, and even search for homes that are on the market.

How to Evaluate Your Options

1. Compare the Total Cost of Ownership

A move involves more than a new mortgage. Homebuyers should also factor in:

  • Property taxes
  • Insurance
  • Maintenance
  • Utilities
  • Closing costs

Comparing these expenses with the cost of renovation often reveals the more economical path.

“There isn’t a one-size-fits-all answer,” McCarthy notes. “A useful approach is to compare the total cost of renovating to the full financial picture of buying a new home. When customers see those numbers side by side, the right decision becomes much clearer.”

2. Consider Timing

The value of renovating versus relocating often depends on how long you plan to stay in the home after the project is complete. Renovations typically make the most financial sense if you plan to stay in the home long enough to enjoy the improvements and potentially recoup some of the investment. 

They may make less sense if you expect to outgrow the home soon, anticipate needing a very different layout in the near future, or you’re uncertain about staying long enough to benefit from the remodel. On the other hand, buying a new home can be the better option when your needs are already changing or you’re looking for a space that will serve you well for the next chapter ahead.

3. Explore Financing Options

Homeowners have several tools available to fund a renovation or support a new home purchase:

  • HELOC
  • Home equity loan
  • Refinancing 
  • New mortgage financing with pre-approval

“We encourage homeowners to take a full holistic view – financial, emotional, and lifestyle factors all matter,” Perveiler says. “Our teams can help you understand what’s feasible, what aligns with your long-term goals, and how to structure financing to support either path.”

Finding the Right Path Forward

Whether you’re expanding your current home or ready to search for a new one, the right decision comes down to balancing cost, convenience, and long-term needs. Renovating can be an effective way to personalize your space while keeping your existing mortgage rate. But for some families, buying a larger home may offer an opportunity to match their needs and lifestyle.

Exploring both choices with clear financial insight – and the support of trusted lending professionals – can help you make a confident, informed decision about your next chapter.