📈 The Shift Isn’t Coming—It’s Already Here

We’re halfway through 2025, and the story is clear: homeowners are staying put and renovating.

With interest rates still hovering above 6% and inventory at record lows, American homeowners are choosing to upgrade the homes they already own—rather than enter a brutal market. For lenders, this shift has opened up a powerful, growing opportunity: renovation financing.

According to Freddie Mac, over 80% of U.S. mortgages are locked in below 5%. That “rate lock-in effect” has frozen traditional mortgage activity—but it’s also unleashed demand for second bathrooms, kitchen reconfigurations, ADUs, and energy upgrades.

🛠️ Homeowners Are Renovating, Not Relocating

The housing market is stuck—but the home improvement economy is thriving:

• U.S. homeowners are on track to spend over $500B on renovations in 2025 (Harvard Joint Center)
• Over 35% of them plan a major project this year—not just for lifestyle, but as a value-add
• Top reasons: aging-in-place needs, multigenerational living, layout changes, and long-term ROI

The message is clear: homeowners aren’t just spending—they’re investing.

💸 Renovation Loans Fit Today’s Market

HELOCs, home equity loans, renovation-specific second mortgages, and even unsecured options are all seeing renewed demand. But lenders can’t rely on basic rate sheets to win this business. Borrowers want clarity, confidence, and proof that their project makes financial sense.

That’s where solutions like PropIQ come in—equipping lenders with renovation intelligence that helps:

• Personalize outreach to existing mortgage holders
• Quantify the impact of specific projects on home value
• Empower borrowers to take action with data-backed confidence

🏦 Smart Lenders Are Getting Ahead

Some of the most innovative banks and credit unions in 2025 are:

• Bundling renovation loans with ROI insights and contractor guidance
• Creating home improvement campaigns around market timing and incentives
• Partnering with platforms like PropIQ to identify and nurture ready-to-renovate borrowers within their book

In active pilots, this approach has led to a 22% lift in engagement and generated $20M+ in new loan activity—without competing on rate alone.

🔑 The Bottom Line

The mortgage slowdown isn’t a temporary glitch—it’s a structural shift.But homeowners still want to improve, and they still need financing to do it.

2025 belongs to lenders who help borrowers unlock the value inside their walls—not just the ones chasing new originations.

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