Americans are on a homebuying spree, according to recent data from the Census Bureau. At the same time, the year 2021 has been termed ‘the year of DIY and home renovations’ as more Americans spend more time at home and the demand for home loans increase. From seeking more backyard space to adding on extensions for a home office, the drive for home improvement has meant many homeowners have now found themselves at a crossroad asking the question: Do I renovate or move to a new home? When it comes to finances, each option has its merits and perils. The key comes down to knowing when the renovation is cheaper than moving, and knowing when it’s time to move on. In some cases, renovations can come out on the winning side on comparison of Renovate Or Move Homes, at least financially.
Moving Can Cost More Down The Line
While you can expect to pay more upfront when renovating, moving can end up costing you more later down the line. Past estimates have put the cost of moving between $15,000 to $200,000. For labor alone, the average cost of moving starts at $14 per hour. Some experts have put the national average of moving at about $1,400 but for homeowners, this increases with the addition of closing costs, realtor fees, and homeowners insurance. On the other hand, the average American spends $13,000 on renovations but this is completely within your control and can be mitigated with DIY projects. It is also much more affordable when it comes to financing compared to buying a new home. Therefore, you should think about your budget when asking yourself whether to remodel or move homes. Keep in mind if you’ve ever had trouble with the law and need to rent something in between moves, apartments that accept felons can be hard to find.
The Booming Housing Market Can Mean Higher Buying Costs
The demand for homes is soaring across America. According to a study by Realtor.com, America is short of 5 million homes. With the supply of homes on the market dangerously low, this also means that house prices continue to climb upwards as the gap between demand and supply continues to widen. It also means that the differences between buying and renovating are widening. For instance, closing costs and commission fees are calculated based on property values. The higher those market values climb, the higher the costs will be.
Moving May Give You The Additional Features You Seek- Renovate Or Move Homes?
Finally, think about the things you want to change about your current home. Perhaps you want an additional bedroom for your expanding family or an updated kitchen. If you opt to move homes and find a house with these features, you can expect to pay the market rate for the value added by them. However, you could choose to add them to your current home for less than the market value. For instance, kitchen remodels cost $22,134 but the resale value of a major kitchen remodel comes in at $72,993. As a bonus, you and your family can capitalize on this premium in later years if you do decide to sell your home.
So do you renovate or start looking for a new home? The answer will be up to you in the end. Before you make a decision, think about the costs, the timing of the real estate market, and your desire for personalization. In many cases, renovating can work out cheaper.
