Why Most Homeowners Choose Home Renovations Over Dream Vacations

When given $20,000 to spend, three out of four American homeowners would put that money into a home renovation rather than a dream vacation. That’s the central finding of Rocket Mortgage’s renovation vs. vacation survey, which polled 1,018 US homeowners in December 2025. The preference wasn’t marginal — it was decisive, and the reasons behind it reveal how homeowners weigh personal satisfaction against long-term financial value when making discretionary spending decisions. For contractors, lenders, and real estate professionals, this data offers a concrete picture of where homeowner priorities sit — and what’s driving the sustained demand for home improvement services heading into the next major spending cycle.

What Makes Renovation More Appealing Than Travel

The preference for renovation over vacation has both an emotional and a financial dimension. More than a quarter of surveyed homeowners (28%) said a dream kitchen remodel would feel more satisfying than taking a dream vacation. That’s a meaningful share of people placing the tangible, lasting result of a renovation above the experience of travel. The financial logic reinforces that preference. Forty-seven percent of respondents said resale value factors significantly into their renovation decisions. A well-executed bathroom or kitchen remodel can add measurable value to a home in a way that a vacation cannot. For homeowners who view their property as a long-term financial asset, spending on renovation serves two purposes simultaneously: it improves the home they live in today and supports its value when they eventually sell. That dual return is something discretionary travel simply cannot offer.

Which Projects Homeowners Prioritize

Interior and exterior renovation priorities diverged along predictable lines. On the interior side, bathroom remodels were the top choice among respondents at 28%, followed by kitchen remodels at 25%. Both categories rank among the most frequently cited value-adding projects in real estate appraisals, which may explain why they continue to lead homeowner preferences year after year. For exterior work, landscaping came in at 23%, with windows and doors at 21%. These two categories carry a different kind of appeal — exterior improvements are visible to neighbors and prospective buyers and often contribute to energy efficiency, which adds a functional cost-saving argument to what might otherwise be a cosmetic decision. The consistent spread across both interior and exterior categories suggests homeowners are thinking about their homes holistically rather than focusing narrowly on a single area.

The Scale of the Market Behind These Preferences

Individual homeowner preferences don’t exist in isolation from broader market conditions. According to the Harvard Joint Center for Housing Studies, US homeowners spent $608 billion on remodeling in 2025 — approximately 50% higher than pre-pandemic spending levels. That figure puts the scale of current demand into context: the renovation market is at a sustained historical high, not a temporary spike. The influence patterns shaping renovation decisions are also worth noting. More than half of respondents (53%) said friends and family influence their renovation choices most. Contractors came in at 31%, and design shows at 27%. That sequence tells us the decision to renovate — and what to renovate — typically originates in personal networks before any professional is engaged. By the time a homeowner is collecting quotes or exploring financing, the project category is usually already decided.

How Homeowners Are Paying for Projects

The majority of surveyed homeowners — 53% — fund renovations from personal savings. The remaining 47% turn to some form of financing, with the following breakdown: HELOCs at 13%, home equity loans at 10%, credit cards at 10%, personal loans at 7%, and cash-out refinancing at 4%. The range of financing instruments reflects the diversity of homeowner equity positions and project sizes. HELOCs and home equity loans tend to appear in larger projects where savings fall short; credit cards and personal loans show up more often in smaller scopes with faster repayment timelines. Cash-out refinancing, while least common in the survey at 4%, tends to appear when a homeowner’s existing mortgage terms make it financially advantageous relative to other options — less a function of project size and more a function of overall mortgage strategy.

Home Improvements Win Out Every Time

The data is consistent: homeowners prefer renovation to vacation when choosing how to spend discretionary dollars, and the reasons combine personal satisfaction with long-term financial calculation. Projects that improve daily living and support resale value lead the preference rankings, and nearly half of homeowners need financing to fund them. With renovation spending at historically elevated levels, the underlying demand for home improvement services — and the financial products that support them — reflects a structural shift in how Americans think about their homes.

References

Harvard Joint Center for Housing Studies. (2025). The State of the Nation’s Housing. https://www.jchs.harvard.edu National Association of Realtors. (2024). 2024 Remodeling Impact Report. https://www.nar.realtor/research-and-statistics