Home remodels are growing in popularity. (iStock )
Home remodels are gaining in popularity, particularly as prices for existing homes skyrocket. Nearly 63% of homeowners surveyed by Adobe said they’d rather remodel their homes rather than deal with the home-buying process. The survey included more than 1,000 homeowners across the country.
The home-buying process can be intimidating, but it doesn’t scare away every buyer. One in three survey respondents would prefer to buy than remodel their current homes. The complexities of remodeling are too stressful for many homeowners.
The price was cited in Adobe’s study as the No. 1 reason for not wanting a remodel. Homeowners fear it’s too expensive. Considering that 56% of homeowners who have remodeled their homes exceed their budget, this is a valid fear on the part of homeowners.
Other reasons many homeowners want to avoid remodeling include a lack of time to commit to the project and concerns about construction hassles. Being unsure where to start also makes it into the top four reasons homeowners opt to buy instead of remodel.
Homeowners looking to lower their monthly payments could consider refinancing their mortgage. Credible can help you compare lenders and find the refinance rate that works for your financial situation.
THERE ARE NOW 550 US CITIES WHERE THE TYPICAL HOME VALUE IS $1 MILLION OR MORE
Renovation costs are expected to decline
Renovations and remodels are getting less expensive as the year goes on. Annual spending for improvements and repairs are projected to go down throughout the year and into 2025, according to the Leading Indicator of Remodeling Activity (LIRA), released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
"Residential remodeling is expected to benefit from the rebounding housing market and stabilizing material costs as we move into next year," said Carlos Martín, director of the Remodeling Futures Program at the center.
The amount homeowners will spend on renovations is expected to decline by more than 7% by the third quarter of this year. And costs will likely continue to decline slowly into the beginning of 2025.
"At $451 billion, spending on homeowner improvements and repairs over the coming year is anticipated to be slightly lower than the $463 billion spent over the last year," said Abbe Will, associate director of the Remodeling Futures Program.
However, homeowners shouldn’t expect these lower costs to last forever. "The remodeling downturn is poised to be fairly modest and short-lived with market expenditures steadying at near-record levels," Will said.
You can explore your mortgage refinance options, including cash-out refinances, in minutes by visiting Credible to compare rates and lenders.
NEW CONSTRUCTION STILL POPULAR AS MOST AMERICANS BELIEVE IT’S A BAD TIME TO BUY AN EXISTING HOME
Home sales are down in response to rising rates and prices
Many current homeowners may be reluctant to buy new homes due to high home prices and interest rates that still sit above 7%.
These factors have contributed significantly to the drop in pending home sales. The number of sales dropped almost 8% in April and 7.4% from last year, The National Association of Realtors reported. All regions of the U.S. reported a drop in pending sales, with the Midwest and West seeing the largest declines.
"The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market," NAR’s Chief Economist Lawrence Yun said. "But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply."
Prices on existing homes are still climbing, adding to the struggle homebuyers are facing. The average home sales price jumped to $407,600 in April, the highest price ever recorded in the month of Apriland up 6% from the year before.
"Home prices are hitting record highs, but the pace of gains should decelerate with more supply," Yun said. "However, the prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs."
If you’re thinking of refinancing your home to secure lower monthly payments, you can use Credible's free online tool to easily compare multiple lenders at once.
RENTING IS SLIGHTLY CHEAPER THAN BUYING, PUSHING GEN Z TO RENT MORE OFTEN THAN BUY
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