So you bought your house years ago, and now you want an upgrade. A quick look at the market tells you three things: 1) there is a shortage of houses, 2) prices are sky high, and 3) mortgage interest rates, while lately on the decline, are still higher than your current rate. What to do? Why not join the trend of Americans choosing to remodel their homes instead of sell? TV shows like HGTV’s “Love It or List It” have popularized the option of remodeling a home as an acceptable way to give yourself a nice upgrade without breaking the bank.
Let’s face it: houses in America are aging. The nationwide average home age in America is 35 years. Because the price of newly constructed homes is also on the rise, with the average in January 2019 at just past $373,000, the choice between old or new has never been harder.
Many Americans are choosing to give their older homes a facelift rather than brave the market. According to CNBC, the shortage of affordable housing is projected to continue in the foreseeable future, a crisis which is described as “acute.” Due to the popularity of house-flipping, many affordable houses that go up for sale in an as-is condition are snapped up by cash offers from greedy investors intent on turning a profit, leaving would-be dwellers without affordable options.
Speaking of affordable, one of the results of the housing shortage is the increase in house prices. Low supply, high demand is basic economics, and the house market is no exception. The fewer houses on the market, the higher those prices. This is especially the case in areas with an already high cost of living, such as California, where average home prices in some neighborhoods have surpassed $1 million.
Mortgage interest rates have been steadily creeping upward and recently hit their highest rate since 2011. While this is generally a sign of a healthy economy, it doesn’t do anything to help the average American buyer.
Rather than buying, many Americans are choosing to remodel their existing homes. This cost-effective alternative not only increases equity, but provides dwellers with nicely upgraded and customized premises. With the current housing situation projected to continue, personal flippers are likely to become a bigger trend, giving homeowners another option in the ever-changing American housing market.