When your current home no longer fits your needs, you’re faced with a big decision: should you renovate or should you move? For many California homeowners, this question has taken center stage—especially with changing mortgage rates, high home values, and the rising costs of construction. Let’s break it down so you can make the smartest decision for your wallet, your lifestyle, and your long-term goals.

Take this common scenario: You love your neighborhood in Los Angeles, Palm Springs, or San Diego. The kids are settled, and your commute works, but the kitchen’s outdated, the layout is tight, and your dream of an outdoor living space is still on your vision board.Do you put your energy into renovating? Or do you search for something turnkey that checks all the boxes?Here’s how to weigh your options—and potentially save thousands either way.

Falling Interest Rates May Open New Doors

As of early 2025, mortgage rates have been on a steady decline, making both home purchases and renovations more financially accessible compared to last year. With 30-year mortgage rates now around 6.5%—a drop from over 7% last summer—homeowners are seeing new opportunities open up. If interest rates continue to fall, better terms on second mortgages, HELOCs, and cash-out refinances could make funding renovations even easier. This shift is encouraging many homeowners who felt “rate-locked” to reconsider the idea of moving or upgrading.

Renovating: Customization Meets Complexity

If you're attached to your location and want more control over the design, renovating could be the answer. But it’s not without challenges.

Pros:

Stay in your current location and school district.
Customize your home exactly how you want it.
Add value with smart upgrades (kitchens, baths, ADUs).

Cons:

Remodeling costs in California can be steep.
Adding a bedroom can range from $60K to over $120K depending on permits, materials, and labor.
Living through renovations can be stressful (think noise, dust, and delays).You may need to rent temporary housing, which adds to the costs.

Pro tip: Get multiple bids from local, licensed contractors and factor in time, risk, and how long you plan to stay in the home.

Moving: Fresh Start, but Higher Upfront Costs

Selling and buying a new home might seem like the simpler solution—especially if your renovation wish list is long—but it comes with its own set of costs.

Pros:

Opportunity to “start fresh” with a turnkey property.
Less disruption to your daily life.
It may reduce long-term maintenance costs.

Cons:

Higher upfront costs, including 6%–10% in seller closing costs2%–6% in buyer closing costs, plus moving expenses
Risk of trading a low mortgage rate (if purchased before 2022) for a higher one
Competitive housing market can limit options and increase prices

How to Decide: Ask Yourself These 5 Questions

Do I love my neighborhood enough to stay for 5-10 more years?