The Fed Isn’t Cutting Rates This Year. Here’s How to Sell Renovations Anyway

The rate cut most homeowners were counting on isn’t coming.

On June 17, the Federal Reserve held its benchmark rate at 3.50–3.75% for the fourth consecutive meeting. The updated dot plot shifted hawkish: the median year-end projection rose to 3.8%, up from 3.4% in March, with nine officials favoring at least one rate hike before December. Markets now price a 25-basis-point increase by October. The era of waiting for lower rates is over.

Your homeowner clients likely feel stuck. HELOC rates are averaging 7.47%. Home equity loans sit above 8%. The homeowner who was waiting for rates to drop before greenlighting that kitchen remodel just learned the wait could extend well into 2027.

But homeowners are still spending. Renovation spending is projected to hit $526 billion this year. In 2025, 54% of homeowners financed renovations through home equity products, and they did it at rates well above the pandemic lows. Demand is cautious, not dead.

Andriy Bezruchuk, founder of Bezruchuk Inc., is a general contractor with over 12 years of experience in Washington and Ohio, specializing in high-end residential remodeling. His clients are less rate-sensitive than most, but the selling strategies he uses in an uncertain market apply at every price point.

The real objection is uncertainty, not the rate number

Homeowners aren’t doing the math on 7% versus 4% and deciding they can’t afford it. They’re looking at the broader picture and freezing. The FOMC just raised its core inflation forecast to 3.6% for 2026, up from 2.7% in March. Energy prices are volatile. Tariffs are adding costs. The hesitation is less about one number on a loan application than it is about whether right now is the right time to commit to anything.

“What changed is the uncertainty,” Bezruchuk says. “Homeowners are asking themselves, should I invest right now, or should I wait and see what happens?”

The answer, for most homeowners, is that waiting costs something too. Larger renovation projects are particularly sensitive to interest rates and economic uncertainty, but the fundamentals pushing homeowners toward renovation remain strong. The lock-in effect of higher mortgage rates keeps homeowners in their current homes: if you locked in at 3% during the pandemic, moving to a new home at 7% doesn’t make sense. So you renovate where you are. Remodeling has grown from 33% to 44% of total housing investment since 2007, and that share keeps climbing.

Your move: When a homeowner says they’re “waiting to see what happens,” acknowledge the uncertainty, then redirect: what does another year of waiting look like in a kitchen that already needs work? And there’s no guarantee waiting helps. The Fed’s latest projections lean toward a rate increase, not a cut, so a homeowner who delays could end up financing at an even higher rate later on. 

Sell the home they’ll live in, not the return they’ll get

In a rising market with low rates, contractors could sell renovation ROI: “you’ll get 80% of this back at resale.” That pitch worked when homeowners expected to sell within a few years. In today’s market, most of them are staying put, and the resale argument feels abstract.

Homeowners are telling us what they value. The most important outcomes they reported from remodeling were:

• Improved functionality and livability (28%) 
• Durable results (23%) 
• Enhanced aesthetics (23%) 

After remodeling, 64% expressed a greater desire to be in their homes. Kitchen upgrades and primary bedroom suites both received perfect Joy Scores of 10 out of 10.

Here’s how Bezruchuk frames it: “Is it worth investing right now and reselling right away? Probably not. But if you’re planning to live in the house, enjoy it, and then sell down the road, it’s a good trade.”

That distinction is in how you present the estimate. Leading with “this adds $30,000 to your home value” assumes the homeowner is thinking about selling. Leading with “here’s how this kitchen works for your family every morning” meets them where they actually are.

Your move: On your next estimate, lead with how the space will work for the homeowner’s daily life. Walk them through the morning routine, the weekend meal prep, the layout change that fixes the bottleneck they mentioned in the consultation. Right now, the livability pitch is stronger than the resale pitch.

The projects that hold up regardless of rates

Not every project type is equally sensitive to rate anxiety. Kitchen and bathroom remodels continue to lead demand because they address both necessity and daily quality of life. Older homes need updating, and homeowners feel that urgency regardless of what the Fed does.

“Kitchen and bathroom remodels are going to happen regardless,” Bezruchuk says. “People need to upgrade, especially with older homes. And it has a good return on investment if they do decide to sell.”

Below that tier, necessity-driven work holds steady in any rate environment. “Roofing, water damage, those are things you have to do regardless,” Bezruchuk says. “Despite rates, it has to happen.” Homeowners treat emergency and maintenance work as non-discretionary spending. If your project mix skews toward these categories, rate sensitivity is lower than the headlines suggest.

Aging-in-place renovations are a growing category in the same vein. Over the past five years, 73% of remodelers report increased requests for aging-in-place features. Bathroom and kitchen renovations often serve double duty as accessibility upgrades, which gives contractors a second reason to propose the work that has nothing to do with interest rates.

Stop underbidding. Start qualifying.

When demand feels softer, the instinct is to lower your price to win work. Bezruchuk has watched that play out from the other side of the bid table. “The biggest mistake is underbidding to beat the competition,” he says. “Contractors try to give a lower price, but it’s about your experience, not the number.”

“I’ve had clients choose us when we were the highest bidder,” Bezruchuk says. “Clients value expertise, and many would never choose the cheapest contractor.” Bezruchuk may work in a high-end market, but the principle scales. Whether homeowners are shopping for an $80,000 kitchen remodel or a $15,000 bathroom refresh, they’re comparing experience, reviews, and communication, not just the bottom line on the estimate.

Qualify early, adjust scope, don’t drop your price. Bezruchuk publishes starting prices on his website so homeowners know the range before the first conversation. “We’re not trying to oversell,” he says. “We adjust layouts and materials to fit their budget.” That approach filters for clients who can realistically move forward and keeps the contractor from wasting time on estimates that will never convert.

Your move: If you’re not already having the budget conversation before writing the estimate, start now. Ask about budget range on your intake form or during the first call. Contractors who qualify early spend less time on estimates that go nowhere and close at higher margins on the ones that do.

Give homeowners a way to say yes

Bezruchuk’s clients may pay cash, but most contractors’ clients don’t. And with home equity borrowing as expensive as it is right now, homeowners who want to renovate can struggle to find a way to commit. Some will pay out of savings (29%). Some will put it on credit cards (10%). Many will simply delay. 

That delay is where the deal dies. The homeowner wants the work done. You’ve written the estimate. But nobody presented a financing path that felt manageable, so the project sits. Offering financing at the point of estimate means the homeowner’s decision shifts from “can I afford $40,000?” to “can I afford $350 a month?”

Acorn Finance lets homeowners compare multiple loan offers in minutes without affecting their credit score. The contractor presents the total, offers a financing option, and lets the homeowner see real monthly payment numbers. It doesn’t require tapping home equity or refinancing the mortgage, which means the homeowner’s existing rate stays untouched. When the sticking point is “I want to do this but rates are too high,” contractor financing sidesteps the rate question entirely.

Your move: Add a financing option to your estimates. You don’t need to push it. Just include the monthly payment alongside the total and let the homeowner see both numbers. The ones who can pay cash will ignore it. The ones who were about to delay will have a reason to move forward.

Start here

None of this requires you to lower your prices or wait for the rate environment to improve. It’s a shift in how you frame the work, how you qualify the client, and how you make it easier to say yes. 

This week: Reframe your next estimate presentation. Lead with livability and daily function, not resale value. If the homeowner mentions waiting for rates to drop, acknowledge the uncertainty and redirect to what the project does for their life right now.

This month: Set up financing through Acorn Finance so you can present monthly payment options alongside total project cost on every estimate.

This quarter: Review your project mix. If you’re weighted toward large discretionary work, consider adding aging-in-place capabilities, phased project options, or service agreements that give homeowners a smaller first step into the work they want done.

The bottom line

The Fed held rates steady and signaled they could go higher. That’s settled. But over $500 billion in renovation work is still happening, and homeowners locked into low mortgage rates have every reason to stay and renovate rather than move. Closing that work means selling the home the client will live in, qualifying early instead of underbidding, and giving homeowners financing paths that don’t depend on cheap home equity borrowing. The demand is there. The question is whether you’re making it easy enough to say yes.

Homeowners want to renovate. Rates are making them hesitate. Acorn Finance lets your customers compare real loan offers in minutes, so a five-figure project becomes a monthly payment they can commit to, without tapping their home equity or waiting for rates to drop. See how contractor financing works.