From Realtor.com
There’s a growing pool of homeowners who feel stuck. Their homes no longer fit their lives—too small, too outdated, too inconvenient—but with mortgage rates hovering above 6%, the idea of trading up seems out of reach. So instead, many are looking inward, eyeing a remodel to make their existing space work just a little bit harder.
But renovation isn’t always the easier or cheaper path. The average kitchen remodel now costs nearly $25,000, and adding a bedroom can top $60,000. Factor in unexpected repairs, permit delays, and rising material costs, and the numbers start to rival a down payment on a new home.
“When the numbers and the lifestyle pull in opposite directions, the stress goes up and the satisfaction drops,” says Danny Niemela, vice president and CFO at ArDan Construction. “Getting this call wrong costs more than money.”
So how do you know when it’s worth renovating and when it’s time to walk away? We asked contractors, designers, and real estate pros to share the key signs that it’s smarter to move than to remodel.
When renovating is a financial mistake
Remodeling isn’t always a value-adding slam dunk, especially if your home is already priced near the top of the market. In areas where property values have plateaued, you risk over-improving for your block and sinking money into upgrades you might never recoup.
“At some point, the house can only rise so far without dragging the street up with it,” explains Niemela.
Before you commit to a major overhaul, check recent sales in your neighborhood. If similar homes are selling well below what your post-renovation home would be worth, it might be a sign you’re better off relocating.
Another major red flag: when your renovation budget starts climbing toward a significant portion of your home’s current value. While modest updates might be worthwhile, large-scale projects can spiral quickly.
“If renovation costs exceed 60% to 70% of your home’s market value—or if major systems like plumbing, electrical, or roofing all need upgrades—it’s often smarter to move,” says Jeri Goodkin-Dausey, Certified General Contractor at SBC.
Experts suggest setting a clear renovation cap based on your home's resale ceiling and current condition. If the math doesn’t make sense or the upgrades won’t solve the root problems, it might be time to explore other ZIP codes.
Put another way: “If you are looking at a $200,000 renovation on a $650,000 house in a $700,000 neighborhood, you are already burning daylight,” says Niemela. “That budget should be redirected toward a home that meets your needs today, not one you are forcing into a box it outgrew 10 years ago.”
Signs you’re headed for a money pit
Even the most carefully planned remodel can unravel once the walls come down. Hidden structural issues, outdated systems, or code violations can balloon your budget—and none of these fixes makes your home feel newer or more functional.
“Any job where a demo exposes foundation, sewer, or structural problems—repairs that don’t alter the home’s function but are costly—is a red flag,” says Jacob Naig, owner of We Buy Houses in Des Moines.
And once local permit offices get involved, things can slow to a crawl. Multiple layers of approval, fees, and design revisions can delay construction and drain your contingency fund before demolition even begins.
If your project requires navigating zoning boards, HOA approvals, or city plan reviews, prepare for added cost, and consider whether that time and money would be better spent on a turnkey home somewhere else.
How interest rates and inventory shift the equation
For many homeowners, the biggest reason to stay put is their mortgage rate. If you locked in a low rate during the COVID-19 pandemic-era housing boom, walking away from that loan now can seem daunting.
“If your first mortgage falls into that amazing 3% range, hold on to it as long as you can,” says Annie Obermann, co-founder and principal designer at Forge & Bow. “Then use a HELOC or construction loan to finance only the renovation.”
Sticking with your existing loan and funding a renovation might be the more financially sound option, especially if you’ve built up equity and can access favorable terms.
But it’s not just rates that complicate the decision to move; it’s also what housing stock is available. In many markets, inventory remains tight, and the few homes that do hit the market might not check all your boxes.
“Limited housing inventory can make the decision tougher,” explains Fred Loguidice, real estate investor at Sell My House Fast Virginia. “If you can't find a suitable home to move into, you might be forced to renovate your current one, even if it's not the ideal scenario financially.”
That said, 2025 has brought a slight shift in some regions.
“In 2025, housing inventory has seen some growth,” Loguidice adds, “which could give more options to those considering a move.”
The decision often comes down to timing. If you can find a home that meets your needs and is worth the cost of a higher mortgage rate, moving might offer more long-term value. But if the options are limited or financing costs are too steep, remodeling could be the better fit.
Lifestyle factors that make moving the better choice
As families grow, priorities shift, and routines evolve, the once “perfect” home can start to feel cramped or chaotic.
“A three-bedroom house with two kids and no office felt fine in 2019. Now it is chaos,” says Niemela. “At a certain point, peace of mind and daily comfort become worth more than any spreadsheet says.”
Even with a sizable renovation budget, some homes simply can’t be reconfigured to meet changing needs, whether due to lot size, layout, or zoning restrictions. When your living situation no longer supports your lifestyle, a fresh start might be the only real solution.
“Household increase or decrease is the No. 1 reason people move,” adds Mark Severino, Best Texas House Buyers. “There are only a few circumstances where one can renovate a house to add an additional room.”
Whether you're chasing opportunity, stability, or a change of pace, relocation can offer the lifestyle reset a renovation can’t. If your emotional needs or family goals have outgrown your address, moving might be the most meaningful upgrade of all.
When staying put makes more sense
Not every home needs to be replaced, especially if you’re already in a location that checks all the right boxes. Whether it’s your quiet cul-de-sac, the school district you trust, or the sub-3% mortgage rate you were lucky enough to lock in, there are plenty of reasons to stay put and reinvest in the home you already have.
“if you love your lot. If you love where you're zoned for schools, if you have a lot of equity in your home ... you're going to save a lot of money, but you're also going to save a lot of time and energy if you work within your existing space,” says Zack Lazo, marketing director at Cornerstone Remodeling.
For homeowners with strong equity and a solid mortgage, remodeling can be a savvy way to level up your living space without resetting your entire financial picture.
Not every renovation has to be a full-scale gut job. Modest, well-targeted improvements can add serious comfort and value, especially if you plan to stick around.
But know your limits.
“If your equity is below 25% or your home is already priced near the top of your neighborhood, pouring more money into it can turn the whole project upside down,” says Niemela.
Instead, focus on upgrades that enhance livability and align with your long-term goals without overspending on customizations that won’t translate to resale value.
Final questions to ask before you choose
There’s no spreadsheet or Google search that can fully answer the question of whether to stay or go. But if you’re stuck between demo day and moving day, a few honest questions can help clarify what’s really right for you:
What’s your equity position? Do you have enough built up to remodel or to fund the next chapter?
Will this home still serve your needs in five or 10 years? Or are you stretching it to fit a life it’s already outgrown?
Can you afford the mess, delays, and stress of a major renovation? Be real: Living through construction isn’t for everyone.
Are you renovating because you love your home—or because you’re avoiding a harder decision? Sometimes the dream kitchen is masking a deeper desire for a fresh start.
In the end, the answer might lie somewhere between logic and instinct.
“Follow the math, then listen to your gut,” says Matt Schwartz, mortgage broker at VA Loan Network. “If your future plans include growing or downsizing in three to five years, it’s often smarter to move now.”
