The typical home improvement project costs three-quarters more than it did 10 years ago, according to a new report from Lending Tree.
The median cost of a home improvement project rose from $1,200 in 2015 to an inflation-adjusted $2,113 in 2025—a shocking 76% increase.
The largest year-over-year jump happened between 2021 and 2023, when costs rose 22.2%.
Material costs and labor costs have both skyrocketed in recent years, according to Richmond real estate agent Daniel Yoon, causing a steep overall cost increase. Having renovated two homes of his own, Yoon also points out that most projects are bigger than they appear at the start.
“Good tradespeople are booked weeks out, and they price like it. Materials went up after 2020 and never came back down, and tariffs have added to that,” Yoon tells Realtor.com®. “On top of that, a lot of jobs grow once you start. You open a wall in an older house and suddenly you’re paying for electrical work and permits you never planned on.”
Homebuilders reported that the cost of key homebuilding materials increased 6.7% over last year, according to the National Association of Home Builders Housing Market Index survey for 2026.
Plus, a worsening shortage of skilled-trades construction workers is costing the United States $10.8 billion per year in added costs, according to the Home Builders Institute.
Still, many homeowners are opting to take on renovations rather than move, often so they can hold onto their lower mortgage rate.
“A lot of people are sitting on a rate around 3%. Selling means giving that up, buying at today’s prices and borrowing at today’s rates,” says Yoon. “Next to that, even a big kitchen remodel looks like the cheaper option.”
The average cost of routine maintenance and upkeep can change a lot based on when the home was built, according to Lending Tree’s research. Routine maintenance costs roughly $1,433 per year for most homes, but jumps to $1,706 for homes built before 1940.
Homes built after 2015 show steep drops in yearly maintenance costs, with homes built in 2022 and 2023 costing just $173 on average to maintain.
While median listing prices for newly built homes in the United States, at $450,256 in quarter two of 2026, is slightly higher than that of existing homes, which fell to $408,317 in the second quarter, the potential need for repairs on older homes should be taken into consideration.
“Buyers compare list prices, but that’s only part of what a house costs you. Richmond has plenty of pre-1940 homes in neighborhoods like the Fan and Church Hill. They’re beautiful, but you’re often dealing with old plaster, original wiring, cast iron drains, and drafty windows, and that shows up in your budget every year,” says Yoon. “A new build comes with a new roof, new HVAC and a builder warranty, so the first decade is usually pretty quiet.”
He added that builders can often offer rate buydowns and help with closing costs, which individual owners can’t often match.
Lending Tree found that the majority of homeowners are able to fund home improvement projects with cash from savings. The report shows that 75.7% of projects were paid for in cash, far outpacing the next payment options, credit cards at 6.3%, homeowners insurance settlements at 3.9%, and home equity loans at 3%.
However, estimated median cost of repairs also varied by funding source. The median cost of a project paid for in cash was $1,902, whereas the median cost of a rennovation funded by a homeowners insurance settlement was $9,963, and the median funded by a home equity loan was $7,924.
Minor and routine work should be paid in full with cash when possible, but it may be necessary to seek other funding for major repairs, says Matt Schulz, Lending Tree’s chief consumer finance analyst.
“Borrowing against home equity may be reasonable for a large, necessary project with a long useful life, especially when you have strong equity, stable income, and a clear repayment plan,” says Schulz in the report. “However, there’s a risk there. Putting your house up as collateral isn’t something that should be done lightly.”
Homeowners should save money in advance to use on home maintenance—that way, they are prepared for repairs and can avoid taking out loans. Yoon recommends saving 1% to 3% of the home’s value per year, leaning toward the high end if the house is older.
“Keep it in a separate account so it doesn’t get spent on something else. Then treat your inspection report like a calendar. Write down how old the roof, HVAC, and water heater are, and start saving for each one before it fails,” he advises. “I’ve replaced roofs on both houses I’ve lived in, and that’s not a bill you want to see for the first time.”
