The renovation economy: how locked-in mortgages are rewriting the American Dream

With US mortgage rates easing, homeowners are choosing renovation over relocation, a shift that is stress-testing the nation’s consumer-credit infrastructure and reshaping local economies.

 

For decades, the American Dream has been defined by upward mobility – buying, selling and moving as life evolves. But in 2026, that mobility is being redefined by powerful economic forces.

 

Despite mortgage rates beginning to trend downwards, hovering in the low 6 per cent range, these so-called “golden handcuffs” of existing loans remain a formidable barrier. More than half of US homeowners hold mortgage rates below 4 per cent, making it economically irrational to trade into a higher‑cost loan on a new home. As a result, the American Dream isn’t disappearing – it’s being reconfigured.

 

Rather than purchasing new homes, Americans are reinvesting in the ones they already have. The US home improvement market is projected to approach $688 billion by 2029, driven by demand for high-return kitchen and bath remodels, roofing, HVAC upgrades and energy-efficient improvements. This “renovation economy” represents a structural shift in how Americans build wealth, improve quality of life and participate in their local economy.

 

The American Dream now begins at home

 

This shift is about much more than a new kitchen or roofline. When homeowners decide to renovate instead of relocating, they are making long-term decisions about the stability of their community, school districts, economic opportunity and the financial future of their family. Yet the renovation economy only works if homeowners have access to transparent, real-time financing.

 

Traditional financing models weren’t built for a world where a project can be scoped, bid for and started within a matter of days. Homeowners want to make meaningful upgrades, but not at the cost of draining their savings or enduring a slow, cumbersome lending process.

 

Financing at the speed of decision

 

Historically, homeowners seeking a $20,000 roof replacement or a $50,000 kitchen remodel were often sent to a bank branch, asked to complete extensive paperwork, and required to wait weeks for a decision on a HELOC or personal loan. For contractors, that friction frequently translated into stalled projects, downgraded scopes of work or a complete cancellation.

 

Embedded lending changes that dynamic by bringing financing directly into the moment of need. When credit is offered transparently at the point of sale, during an in-home consultation, or during price presentation, homeowners can evaluate project options with clarity and confidence rather than uncertainty.

 

Industry research supports this shift. According to McKinsey, embedded financing can increase customer spending by up to 20 per cent, a meaningful difference for small and midsize businesses operating in a competitive, labour-constrained environment.

 

In practice, these results are even more striking. Contractors adopting real-time financing are already reaping the benefits of increased project sizes and a growing sales pipeline. A Louisiana-based bathroom remodelling company, Mr Bath, experienced a 20 per cent increase in average project size over four months while compressing customer decision timelines from months to same-day commitments after using Momnt.

 

Similar results have emerged at EZ Baths, another Momnt partner serving regional renovation markets. Within one year of adopting embedded financing, EZ Baths effectively doubled its business, generating more than $7 million in sales.

 

These aren’t just business wins. They are indicators of how the renovation economy is strengthening the business environment in their local communities.

 

A more responsible future for consumer credit

 

As more capital continues to flow into home improvement lending, we face the question of whether financing will empower or overwhelm homeowners. Real-time financing must not outpace consumer understanding. Renovations are significant financial investments, and financing should reduce, not introduce, uncertainty.

 

Responsible real-time financing requires:

• Clear, transparent terms
• Instant but rigorous credit decisions
• Partnerships with regulated, reputable financial institutions
• Strong security and fraud-prevention measures

 

At Momnt, we’re focused on combining speed with stewardship to align the interests of contractors and homeowners alike, enable sustainable business growth and help consumers invest in their homes responsibly.

 

What’s next for the American Dream

 

The spring 2026 selling season will not only serve as a key indicator for housing demand but also as a referendum on how Americans navigate a high-equity, low-mobility environment. While inventory is increasing, elevated home prices and persistent rate sensitivity suggest that renovation, not relocation, will remain the preferred path for many households.

 

The home is becoming more than just a dwelling. It’s a long-term platform for comfort, investment and financial decision-making. And the businesses equipped to support these homeowners become essential engines of local economic growth.

 

The renovation economy is reshaping the American Dream from a narrative of movement to one of improvement. With transparent, accessible financing, we can help people reinvest confidently in their most valuable asset: their home.

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To learn more about how Momnt is supporting contractors and homeowners across the US, visit momnt.com

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Tom Anderson, CEO, Momnt