Homeowners Plan Major Investments, Impacting Housing Market

A substantial 66% of homeowners intend to make significant investments in their homes within the next five years, marking the highest level recorded by Angi's annual State of Home Spending Report. This trend, driven by economic factors such as inflation, elevated interest rates, and income uncertainty, suggests a prevailing "stay-put, let's-just-improve-our-home" mentality among property owners. Tammy Crosby, CEO of The House Designers, notes that these economic pressures are likely contributing to homeowners opting for renovations rather than selling.

This widespread commitment to home improvement has implications for the current housing market, particularly concerning inventory levels. According to July 2026 housing data from Realtor.com®, national housing inventory remains 11.6% below typical 2017 to 2019 levels, despite a modest increase in active listings compared to the previous year. While this indicates some market recovery, it still signifies a deficit in available properties. The decision of homeowners to renovate instead of sell can exacerbate this low inventory issue in the short term. This prolonged shortage of homes for sale can limit options and intensify competition for prospective buyers, especially those with budget constraints. Crosby further explains that current high prices, influenced by low stock and interest rates, make it more sensible for many to postpone purchasing until buying conditions improve.

Despite the short-term challenges for buyers, the long-term outlook for this "stay-put" trend may offer benefits. When these homeowners eventually decide to sell, buyers could gain access to properties that have been recently updated and well-maintained. This could lead to sellers potentially achieving higher resale values for their improved homes. Angie Hicks, co-founder of Angi, suggests that while major home investments are a strong indicator of homeowner commitment, they do not definitively signal an immediate intention to move or stay permanently. The report highlights that the decision to invest heavily in a home is often a strategic response to current economic conditions, aiming to enhance living spaces and property value rather than solely preparing for a sale.

The "stay-put" mentality, characterized by homeowners prioritizing renovations and upgrades, directly influences housing market dynamics. By investing in their current residences, homeowners are effectively removing potential listings from the market, thereby contributing to the ongoing low inventory. This situation creates a more competitive environment for buyers who are already contending with higher interest rates and increased property prices. However, the long-term consequence of these investments could be a future market with more desirable and move-in-ready homes, potentially benefiting future buyers and sellers alike through enhanced property values and improved living conditions.