This blog post was originally published on Retrofit Home Magazine on July 21, 2025.

The housing affordability crisis is hitting home for many Americans. A September 2024 Pew Research survey found 69 percent of Americans said they were “very concerned” about the cost of housing, up eight percentage points from April 2023.

With mortgage rates still elevated and homeowners priced out of moving, many are choosing to invest in home renovations to avoid losing their existing terms.

Retrofitting experts have a unique opportunity to reach these homeowners. But in a market where the bottom line drives decisions, contractors will need flexible and transparent financing options to close the deal. Here’s how the market is shifting—and how modern financing tools can help contractors stand out.

What’s Changing about Financing?

The traditional path to securing a loan, which entails applying through a bank or credit union, has become increasingly complex. Financial institutions are re-evaluating their lending criteria, and the Federal Reserve recorded eight straight quarters of standards tightening for non-credit card, non-auto loans at more than 10 percent of banks beginning in Q4 2022. And while this trend briefly stabilized in Q4 2024, it began to rise again in Q1 2025.

In response, private credit funds operated by institutional asset managers have become more common. These lenders are often more accessible and offer fast funding with flexible terms designed to fit a range of budgets.

That’s welcome news for homeowners navigating stubbornly high mortgage rates. The average 30-year fixed-rate mortgage remains above 6.5 percent while more than half of current homeowners are locked in below 4 percent. As these houses age, however, residents will need to renovate if they want to keep their homes comfortable and updated.

How Can Contractors Benefit?

Contractors aiming to capture this market need more than craftsmanship. They’ll need to make flexible financing part of their sales process without letting back-office tasks distract them from getting the job done right.

Point-of-sale financing, integrated directly into existing workflows, makes this balance possible. Homeowners can compare different credit offers in real time and get approved in minutes, all without leaving the kitchen table.

This approach offers multiple benefits. Homeowners get clear terms and simple applications, removing friction from the sale and accelerating decisions. When they’re presented with a range of options, customers are often able to finance larger projects while remaining within budget, allowing contractors to offer additional services or premium materials. Contractors then receive the funds quickly and can start work without delay.

Make Financing a Secret Weapon

Many contractors see financing as a hurdle—slow approvals, rigid terms and delays that stall projects. With the shift toward new financing sources, the sales process can be an asset, not a pain point.

By integrating flexible loan solutions directly into the sales flow, contractors remove friction from the customer journey, win more jobs and keep the focus on what they do best: delivering quality work.