The U.S. housing stock is aging, which means lots of bathrooms and kitchens need remodeling. The number of existing homes that have reached the age at which renovations are typically done — between 20 and 39 years old — is projected to increase to about 24.2 million in 2027, from 20.5 million in 2018, according to an industry report from the National Kitchen & Bath Association (NKBA), shared with The New York Times.

Moving to a newer home that’s in better shape is out of reach for many people, because a new mortgage will usually come at a much higher interest rate. Eighty percent of interest rates on existing mortgages are below 5 percent, while the average rate for new mortgages was about 7 percent on July 20, according to Freddie Mac. But staying put and paying for a renovation may not be any easier.

Remodeling costs most often come out of savings, but that money is tight these days: While the national savings rate increased early in the pandemic, peaking in the second quarter of 2020 at an average of 26.2 percent of disposable income, it has tumbled as the country has returned to its prepandemic spending habits. And faced with recent inflation, it’s no surprise that people are saving less.

Another way to finance renovations is through home-equity and cash-out refinancing loans, both of which allow borrowing against the equity in one’s home. Home prices have been soaring, so homeowners might have the equity they need. Unfortunately, interest rates for second mortgages are typically a bit higher than those for first mortgages, making financing home renovations — which are already more expensive because of inflated costs for materials and labor — impossible for many.

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