Should I renovate my current home or sell and buy a renovated one?

In 2026 the answer for most US homeowners is RENOVATE — but only because of three inputs most online comparisons skip. (1) Mortgage rate lock: ~60% of US homeowners with a mortgage are locked below 5%; trading a $300K balance from 3.5% to today's 7.25% adds ~$540/month for 30 years (~$194K in carrying cost). (2) Selling + buying friction: ~12% combined (6% realtor + ~3% selling closing + ~3% buying closing + moving) is $60K on a $500K home. (3) Property-tax basis reset in California (Prop 13), Texas, and Florida can permanently 2–4× the bill on a comparable home. Renovating loses on the math in five specific scenarios: cost >25% of home value (over-improvement), you bought after 2022 at a high rate (no lock to preserve), the house is fundamentally wrong (commute, school zone, layout no renovation fixes), you're selling within 3 years, or your gain exceeds the federal capital-gains exemption ($250K single / $500K married).