Home renovations are becoming more popular. (iStock )
Home renovations are becoming more popular, especially as prices for existing homes soar. About 63% of homeowners Adobe research Many said they would rather renovate their home than go through the process of buying a home. The survey involved more than 1,000 homeowners across the country.
The home-buying process can be intimidating, but not all buyers are intimidated: One in three survey respondents would prefer to buy rather than renovate their current home, and the complexities of renovating are too stressful for many homeowners.
Adobe research cites price as the top reason people don’t want to renovate. Homeowners fear it will cost too much. This is a legitimate fear for homeowners, considering 56% of homeowners who renovate their home do so over their budget.
Reasons why many homeowners avoid remodeling include not having enough time to devote to the project and concerns about the hassle of construction. Not knowing where to start is also one of the top four reasons why homeowners choose to buy instead of remodeling.
Homeowners looking to lower their monthly payments may consider refinancing their mortgage, and Credible can help you compare lenders and find a refinance rate that works for your financial situation.
Currently, 550 cities in the United States have an average home price of over $1 million.
Renovation costs are expected to decrease
Renovations and remodeling are getting cheaper every year. Annual spending on improvements and repairs is projected to decrease between this year and 2025. Leading Indicators of Home Improvement Activity (LIRA)The announcement was made by the Remodeling Futures Program at the Harvard University Joint Center for Housing Studies.
“Home renovations are expected to benefit from a recovering housing market and stabilizing material costs heading into next year.” Said Carlos Martin, director of the center’s Remodeling Futures program.
The amount homeowners spend on renovations is expected to fall by more than 7% through the third quarter of this year, and costs could continue to fall slowly through early 2025.
“Home improvement and repair spending over the next 12 months is expected to be $451 billion, slightly lower than last year’s $463 billion,” said Abe Will, associate director of the Remodel Futures program.
But homeowners shouldn’t expect these lower costs to last forever: “With market spending stabilizing at record levels, any slowdown in remodeling is likely to be fairly mild and short-lived,” Will said.
You can research mortgage refinance options, including cash-out refinance, in just a few minutes by visiting Credible to compare rates and lenders.
New construction remains popular, as most Americans believe now is a bad time to buy an existing home.
Home sales are declining as interest rates and prices rise
Many current homeowners may be hesitant to purchase a new home due to rising home prices and interest rates that are still above 7%.
These factors are contributing significantly to the decline in pending home sales, which were down about 8% in April and down 7.4% from last year. The National Association of RealtorsEvery region of the U.S. reported a decline in the number of properties for sale, with the Midwest and West seeing the largest declines.
“Home buying slowed during April as interest rates rose, even as inventory increased on the market,” NAR chief economist Lawrence Yun said. “But the Federal Reserve’s planned rate cuts later this year should improve homebuying and boost supply, which should help the situation.”
Existing home prices are still rising, adding to the woes facing home buyers: The average home sales price jumped to $407,600 in April, the highest April price on record and up 6% from a year ago.
“Home prices have reached record highs, but the pace of increase should slow as supply increases,” Yoon said. “However, the likelihood of any visible declines in home prices is minimal. In some markets where prices are declining, buyers may see this as an opportunity to enter the market if job growth in the area continues.”
If you’re considering refinancing your mortgage to lower your monthly payments, you can easily compare multiple lenders at once using Credible’s free online tool.
Renting is slightly cheaper than buying, and Gen Z is renting more often than buying.
Do you have a finance-related question but don’t know who to ask? Email a trusted money expert email address: Your question might be answered in Credible’s Money Expert column.
