Americans love their homes and would rather renovate than move
Home owners in the United State would rather renovate their properties than buy a new one, often due to the cost of a down payments, new research has found.
Given the choice, some 76% of Americans would rather use their money to make upgrades to their current home and overall they are largely happy with their home, according to the latest housing aspirations report from real estate firm Zillow.
The trend is especially true for older or retired Americans as 87% of people who are 55 years or older, and 91% of retirees, would renovate their homes instead of using the money for a down payment on a new one.
Some 83% of home owners surveyed said that they love their home and 63% don’t have any plans to sell their homes. The top reasons for not moving are that they love where they are and they don’t want to deal with the hassle of moving.
The report suggests that the preference to adapt a home to their needs instead of selling it and buying a different home could be contributing to the ongoing inventory shortage most markets are facing. Nationally, the number of homes for sale has fallen on an annual basis for 43 months in a row, although the pace of the decline has slowed in recent months.
Another factor that may be affecting the decision to move or renovate a home is rising mortgage rates. Since the beginning of the year, rates have risen by more than 90 basis points, and homeowners who have a low mortgage rate may not want to lose that affordability advantage by buying a new house with a higher rate.
‘Even in a seller’s market, simultaneously buying and selling is an exercise in frustration. Add to that the emotional history between you and your home, and it’s no wonder low inventory has been in a self-fulfilling cycle,’ said Skylar Olsen, director of economic research and outreach at Zillow.
‘Home owners may hesitate to sell because of limited options for them as buyers, but by holding on to their homes, they are themselves contributing to low inventory,’ Olsen added.
Across the 20 metros surveyed, residents of Boston and Detroit were most likely to say they would renovate instead of buying a new home. In each metro, some 80% of the respondents said they would choose to stay in their current home and make necessary updates.
Los Angeles had the smallest share of respondents who would prefer to renovate their homes, but they still make up just over two thirds of Los Angeles respondents.
Renters and young Americans between 18 and 34 years old are among the groups who are most likely to say they would use the money as a down payment.