Homeowners Are Waiting for Costs To Drop Before Renovating — But Is That Smart?

Inflation has cooled. However, costs for materials, labor and financing remain well above pre-pandemic levels, and that’s causing a renovation slowdown. Yet, sitting on the sidelines could prove more expensive than acting now.

After several years of steep price hikes, many homeowners are taking a “wait and see” approach to remodeling or upgrading their home — but should they? Here are six common reasons Americans are delaying home improvements, and why they shouldn’t.

Inflation has cooled, but construction costs aren’t retreating. The Associated Builders and Contractors (ABC) reported that input prices rose 0.2% in June and remain 2.1% higher than a year ago.

While the data reflects commercial projects, it tracks the same materials — such as steel, copper, concrete and energy — that drive home-upgrade costs.

“Nonresidential input price escalation has accelerated in 2025,” said ABC Chief Economist Anirban Basu in the report. “Despite higher-for-longer interest rates and rising input prices, contractors remain relatively optimistic.”

In short, prices aren’t spiking, but they’re not dropping either. Material and energy costs are rising just enough to keep project budgets tight, meaning homeowners who wait for deep discounts may be waiting indefinitely.

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Mortgage rates remain well above their pandemic lows, when 30-year fixed loans averaged just 2.96% in 2021. After two years of steep hikes, borrowing costs have begun to ease.

Home-equity line of credit (HELOC) rates have slipped from about 9.8% in October 2024 to roughly 8.13% today, according to financial analytics firm Curinos.

While still elevated, that drop gives homeowners a bit more breathing room to tap equity for repairs or upgrades. However, waiting for a full return to pandemic-era rates could take years.

Many homeowners are postponing renovations in hopes that material prices will drop further. However, that may be wishful thinking.

Lumber futures currently trade around $540 per thousand board feet, near September 2024 lows, according to market data, as oversupply meets weakening demand. While prices have cooled from the record highs of 2021, most analysts expect them to stay in this midrange rather than return to pre-pandemic levels. In short, material costs have stabilized, just not at the bargain prices homeowners might be waiting for.

Economic uncertainty remains one of the biggest reasons homeowners are holding back.

A survey by Guardian Service, a home-insurance provider that tracks homeowner spending behavior, found that 71% of homeowners postponed renovations or repairs this year because of economic uncertainty.

Nearly one-third of all respondents said they plan to wait another one to two years before tackling major upgrades, while 15% are putting them off indefinitely.

However, delaying home repairs has a hidden cost. The survey noted that most policyholders don’t realize that making certain home upgrades, such as installing storm-resistant windows or replacing an aging roof, can lower their insurance premiums.

Many homeowners assume that waiting will make it easier to find available contractors. However, the opposite is true.

The residential construction industry is facing a record 32% labor shortage in 2025, according to home-services platform Contractor Accelerator.

The shortage marks the most severe skilled-trade gap in modern construction history, with housing starts down 18% nationwide and average project timelines stretching from seven months to nearly eleven.

For homeowners, that means longer waits and higher bids, even if material or borrowing costs stabilize. Skilled labor, not supplies, may be the biggest bottleneck ahead.

Some homeowners are waiting for labor prices to come down, but recent data suggests that’s unlikely.

An analysis by Construction Coverage, a research and review platform for the building industry, found that construction and extraction workers earned a mean annual wage of $63,920 in 2024. That means wages have risen faster than most other costs and are unlikely to reverse. Even if inflation cools, contractor labor will probably remain one of the most expensive parts of any renovation.

Some homeowners are waiting for new rebates or tax credits before upgrading, but that could backfire. Most of the federal energy-efficiency incentives for improvements like insulation, heat pumps and smart thermostats expired at the end of 2025, and new ones are not on the horizon.

All that remains are credits for new homes built through the summer of 2026, according to KPMG. If you’re looking for energy credits, they’re not coming, and you’re best off seizing the savings on the energy itself as early as possible.

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