San Francisco, September 2 — The story begins with a simple truth: sellers want to list their homes, but many can no longer afford to make them market-ready. What unfolded is a growing gap between buyer expectations and seller capacity, shaped by rising costs and shifting priorities in the home improvement market. At its heart is a tension revealed in Angi’s 2026 State of Home Spending Pulse: homeowners are prioritizing essential projects while planning for the future, scaling back but not stepping away.
An Angi survey found that 54 percent of respondents who postponed a home project in the last 30 days cited costs as too high, while 32 percent focused on other personal priorities. Another survey showed that in the same period, 63 percent of homeowners did maintenance, 58 percent did repairs, and only 35 percent undertook renovations.
Carl Medford, a licensed general contractor writing for Inman, points to several cost drivers. The National Association of Home Builders notes a dwindling pool of skilled labor, allowing workers to charge premium rates. Tariffs and trade policies have raised typical remodeling material costs by 6.9 percent for imported goods like appliances, electrical components, plumbing fixtures, hardware, flooring, and metal products.
Higher fuel prices linked to the war in the Middle East push up transportation and inflation. Increased property insurance due to natural disasters, along with higher workers’ compensation, general liability, subcontractor, and general contractor risk insurance rates, add further strain.
Permit fees and compliance requirements have also risen dramatically, lengthening approval times. A concrete example illustrates the strain: refreshing a kitchen that cost under $10,000 a few years ago now commonly requires sellers in the San Francisco Bay Area to invest north of $100,000 to make a home market-ready. Previously, sellers could expect $2 or more in return for every $1 invested, but margins are slimming.
A $1 million home might need $100,000 in upgrades; some sellers instead drop the price to $900,000, but Bay Area buyers pass on original-condition homes and pay more for turnkey properties, believing future renovation costs will exceed the seller’s estimate. Despite high costs, 66 percent of Angi survey respondents plan a major home investment within five years, indicating they are delaying rather than canceling projects. High interest rates lock in sellers, and a trend toward improving current homes over relocating is emerging.
Raf Howery, CEO of Kukun, noted on LinkedIn that in Washington state, the median home getting an addition last week was built in 1958, and 8.7 percent of permits filed in Washington state were to increase square footage. Looking ahead, the market may see more sellers choosing to adjust prices rather than absorb upgrade costs, while buyers continue to favor move-in-ready homes.
The pressure on labor, materials, and compliance shows no sign of easing, suggesting the divide between what sellers can afford and what buyers demand will remain a defining feature of the home improvement landscape.
