BrokerPulse

RealTrends Q32021 BrokerPulse sees brokers still optimistic about the market, wary of competition and wondering when inventory will rise.

2021 RealTrends Brokerage Compensation Report

For the study, RealTrends surveyed all the firms on the 2021 RealTrends 500 and Nation’s Best rankings, asking for annual compensation data for the 2020 calendar year.

Knock.com’s Sean Black on the transaction revolution

Real estate is on its third revolution, from the digital revolution of the early 2000s to the information revolution kicked off by Trulia and Zillow to today's transaction revolution.

Newsletter

The RealTrends BrokerSource and HousingWire OpenHouse newsletters deliver twice weekly information on trends, strategies, analysis, people, and news shaping the real estate industry.

Americans Would Rather Renovate than Buy a New Home

Americans Would Rather Renovate than Buy a New Home

Given the choice, 76 percent of Americans would rather make upgrades to their current home than make a down payment on a new home, according to the latest Zillow Housing Aspirations Report.

Across the country, people are largely happy with their current homes, and would rather stay in them and make updates than move.

The latest Zillow® Housing Aspirations Report finds that 76 percent of Americans would rather use a set amount of money to upgrade their home to meet their needs instead of as a down payment on a new home.

This is especially true for older or retired Americans. Eighty-seven percent of people who are 55 years or older, and 91 percent of retirees, would renovate their homes instead of using the money for a down payment on a new one.

Overall, homeowners are generally happy with their current homes, according to the 2018 Zillow Group Report on Consumer Housing Trends, with 83 percent saying that they love their home[ii]. Most homeowners – 63 percent – don’t have any plans to sell their homes. The top reasons for not moving are that they love their home and they don’t want to deal with the hassle of moving[iii].

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 straight months, 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 Zillow Director of Economic Research and Outreach Skylar Olsen. “Homeowners 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.”

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, 80 percent 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 L.A. 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.

Most Popular Articles

Where is the housing market headed?

Rising incomes, low interest rates and all other factors, including the balance between families looking for housing and the availability of housing, point towards a continuation of the strong housing market of the last 15 to 18 months.

Oct 18, 2021 By

Latest Articles

Abortion, marijuana laws play a role in relocation decisions

People take the politics of a place into consideration when deciding where to move, but other factors including housing affordability and access to jobs and schools take priority, Redfin study shows

Oct 19, 2021 By